How a Multi-Family Office Approaches Distressed Deals

Richard C. Wilson introduces an investor mandate interview for the Family Office Club and speaks with Paul about his firm.

Paul says his firm is a multi-family office advisor managing about seven billion dollars for about forty families globally. He discusses the firm's direct investment work, how it evaluates opportunities during market dislocation and how liquidity and position size factor into distressed investments.

In this video: Richard C. Wilson (Family Office Club interviewer), Paul (Multi-family office advisor)

What they said

1. Building direct investment work. Paul says the firm has invested directly in real estate, private equity and private credit for about ten years. He says it built a team to source, originate, negotiate, structure and monitor those investments. (at 0:55)
2. Evaluating distressed opportunities. Paul says the overwhelming majority of clients have an interest in taking advantage of market dislocation. He says the firm is evaluating distressed private equity funds, distressed real estate funds, direct lending and direct equity opportunities. (at 2:47)
3. Paul on liquidity reserves. Paul says family offices are better positioned than during the crisis he lived through, with more cash. He recommends strategic attention to overall asset allocation and liquidity reserves for opportunities. (at 4:40)
4. Paul on market timing. Paul says it is very hard to pick tops and bottoms. He describes managing at the margin and finding a suitable advisory firm or distressed manager rather than judging opportunities in isolation. (at 5:08)
5. Paul on position size. Paul says things take more money and more time. He advises sizing positions accordingly instead of betting the farm on whether a market has bottomed or on one manager. (at 6:29)

In their words

"they tend to have a desire for other types of non-traditional exposure"

"just filled his warehouse with raw materials that he got at 50% off"

Why it matters if you are building or preserving great wealth

The warehouse example gives liquidity a second job: covering a core business's two years of supplies while distressed opportunities take time to work out.