"Families should consider dedicating some part of their portfolio to increasing wealth. The big question is "how?""
Chicago, IL (PRWEB) November 23, 2015
Linda C. Mack, founder and president of Chicago-based Mack International LLC, the premier strategic family office/human capital management consulting firm, moderated a key panel discussion during the 2015 North American Family Office Conference, Nov. 9-11 at The Taj, in Boston. It was the 10th annual private meeting for significant private business and financial families and their family office executives. The theme was “Families Facing the Future.” Each year Campden Wealth brings together over 120 families from around the world.
Mack moderated a panel of family members and principals who explored if and under what circumstances a high growth investment model is both desirable and viable for a family office. Since each of the panelists represented families with varied approaches, the discussion began with defining the high growth model from each family’s perspective and identifying the profile of a family most likely to be interested in pursuing it. According to Linda Mack, the panelists’ opinions indicated the interest seems to cross generations: “Some people felt high growth was something a first generation wealth creator would be most likely want, while others gave reasons a 5th generation family would also find it aligned with their family goals and objectives.”
Once a decision is made to have a high growth investment model, how does a family go about executing their plan? Multiple approaches were discussed—investing through outside fund managers versus direct investing versus co-investing with other families. “There are trade-offs with each approach but in any case, as time goes on and the family’s needs and experience in the high growth space evolve, so can their approach,” noted Linda. The panel discussed direct investment as an option for families with the requisite experience, interest, resources, and governance. Those that have successfully pursued the direct approach felt it not only enabled them to only enjoy more overall control, but also found it to be an effective way to engage and educate younger generation family members. Allocating to outside managers was discussed as a viable alternative if the necessary capabilities are not part of a family’s infrastructure. These firms have the operational resources and expertise, but some families feel their value can be offset by fees and having less overall control.
“A family new to this investment model might use an outside manager for a time and as they gain more experience, decide to move to a more direct approach,” said Linda. Families might also co-invest with another family who has greater expertise and is amenable to sharing their capabilities.
Regardless of the platform a family chooses, the panel’s conclusion was that it makes sense for all families to have a portion of their investments in the high growth model, whether their priority is to generate or preserve wealth.
Linda Mack summarized the discussion: “Families should consider dedicating some part of their portfolio to increasing wealth. The big question is how. The definition of “high growth” is a relative term. The smart family enterprise compares it to what they are doing overall. It is not an “all or nothing” concept and one size will not fit all. What is right for one family may very well be exclusive to them. It might not be solution for any other. It is important to examine their investment policy, philosophy, objectives, and their appetite for risk and align accordingly.”
About Mack International LLC
Mack International is the premier, boutique retained executive search and strategic management/human capital consulting firm serving national and international clients in the family office, family business enterprise and the wealth management industries on national and international basis. Founded in 2002, the firm has achieved an exceptional track record of success as evidenced by its unmatched industry expertise, in-depth market knowledge and unparalleled track record of success. Founder and President, Linda C. Mack has established proprietary methodologies such as the Mack 360© and is credited for having coined the term “expert generalist” in the industry.
For more information, please visit http://www.mackinternational.com or call 800 976 0015.