How a New York Multifamily Office Approaches Real Estate Debt
At a Family Office Club investor mandate interview, Richard C. Wilson asks Damian about the office's investment strategy, managers and fees.
Damian describes a New York multifamily office's investment mandate and the split between its liquid portfolio and illiquid alternatives. He explains the office's real estate focus, its lending approach and how it considers direct deals and fees.
In this video: Richard C. Wilson (Family Office Club interviewer), Damian (Runs the illiquid alternatives side of a multifamily office)
What they said
- Two investment areas. Damian says the office had invested in private equity and venture capital, but its recent illiquid alternative investments have focused on real estate. (at 1:28)
- US as a destination. Damian says the office is "100% focused in the US." He describes the US as a diversification option for families already exposed to their local currencies and markets through their businesses. (at 2:24)
- Why debt appealed. Damian says loan-to-value could range between 60 to 80, leaving the loan at a discount to the underlying property's value. He cites short-term exposure, good cash flows and no taxation for foreign investors as features that appealed to his clients. (at 3:47)
- Lender balance sheets. Damian says the lenders the office chose were balance sheet lenders with no use. He reports no defaults and no withdrawals in the portfolio, and says those lenders remained positioned at lower LTV. (at 6:37)
- Direct deal review. Damian says the office prefers to assess deals individually and can review a fund when it understands each underlying deal. He says paying partners well can help keep the office in line for good deals. (at 8:31)
In their words
"I know that lending and anything that's income with high quality collateral behind it is of general interest when you're late in the cycle"
"we don't do the underwriting ourselves we don't have the capacity but looking for good lenders we could partner with to invest."
Why it matters if you are building or preserving great wealth
Damian says partners who are paid well may bring the office good deals first. That gives fee decisions a direct effect on which opportunities the office gets to review.
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Anu Aga: Focus on one main cause. Her family found its giving more satisfying and impactful once it chose primary education for the underprivileged in India.
- Binod K. Chaudhary: Never chase a deal out of desperation. Stay cool and look at every part of the deal. Have your advisers and your finance team review it critically. Your counsel should review it too.
- Larry Connor: Learn from every mistake. Larry's team owns its failures and makes no excuses. They learn, change quickly, and keep getting better.
See the data
Frequently asked questions
Had the office invested in Europe?
Damian says it had made some investments in Europe in the past.
What did Damian say about private equity and venture capital?
He says the office was not doing anything in either area because it had no visibility or clarity, and they were not a priority.
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.