How Family Offices Weigh Private Company Deals

In a Family Office Club discussion, Richard C. Wilson asks Ocean about the private investments his clients consider.

Richard C. Wilson asks Ocean how wealthy families approach private company investments. Ocean describes the private institutional opportunities his clients seek and how his team evaluates investments. Richard also explains how he distinguishes venture capital from private equity.

In this video: Richard C. Wilson (Interviewer), Ocean (Family office investor)

What they said

1. Ocean's loss-capacity screen. Ocean says his team asks whether clients can handle losing the money before making an investment. He describes these investments as risky.
2. The fund's stated fees. Ocean says investors in the Altimeter Capital fund would pay 20 to 25% of profits back to the firm. He also says they would pay 2 to 3% per year for management.
3. Richard's manager comparison. Richard describes venture capital as gathering other people's money and spreading it across investments. He says private equity managers analyze a potential anchor asset and build a strategy around it.
4. Access shapes the opportunity. Ocean says Brad Gerstner had access to company shares directly and put them into a private placement fund. Ocean says his clients are interested in these kinds of investments.

In their words

"The last deal that we did was Altimeter Capital."

"The minimum investment was $250,000."

Why it matters if you are building or preserving great wealth

Ocean says Brad Gerstner gets shares directly and, in his view, manages these assets better than anyone else. That makes the fund's fees a payment for access and a manager Ocean trusts, as well as a share of profits.