As the year comes to a close, we take a moment to recall our top stories — including a Q&A with Matt Somma, who began his career in M&A investment banking before joining MSD Capital, Michael Dell's family office; and a profile of Lalalli Senna, the niece of Brazilian racing legend and three-time Formula One champion Ayrton Senna. Read on to discover what other stories made the most-read list.
According to new research from the UK-based financial services firm Ocorian, family offices plan to increase their reliance on third-party providers, particularly for liquid investments, concierge services and wealth planning. The study also reveals that, over the next three years, family offices intend to expand outsourcing across a range of services, including personal financial management, passion assets, family homes, philanthropy and document repositories.
Finally, we will be taking a break for the holidays and will resume normal publication Jan. 2. From all of us at Crain Currency, we wish you the happiest of holidays!
As always, we appreciate any comments, ideas and insights that would make this newsletter more useful. I look forward to growing this family office community with your help. Please email me at [email protected].
HANDPICKED: The 10 most-read stories of 2024 in Crain Currency
By ANDREW COHEN
From the drama of family office executive shake-ups to the allure of exclusive billionaire enclaves and the challenges of building philanthropic legacies, this year offered a fascinating glimpse into the world of the ultra-wealthy. Here are the 10 Crain Currency stories that attracted the most readers this year.
10) Matt Somma’s family office career spans from Michael Dell to J.P. Morgan
Matt Somma’s career began in M&A investment banking before he joined MSD Capital, Michael Dell's family office. There, he built expertise in co-investments and became a leading investment banker to family offices, facilitating over 90 transactions including early bets on Tesla and SpaceX that yielded significant returns.
9) CIO of shipping billionaire’s family office exits in pay drama
The chief investment officer of the family office for one of the world’s biggest shipping fortunes was ousted before he was due to qualify for a six-figure windfall. Denis Blank, 45, was due a bonus on top of an annual salary of about $1.3 million after making several successful investments for Nicrone, the family office for the Angelicoussis Shipping Group.
8) Billionaire Joe Lewis places a 34-year-old atop besieged empire
When Joe Lewis bought a major stake in the Tottenham Hotspur Football Club in 2000, he did so alongside Daniel Levy, the scion of a UK clothing business and father to a 10-year-old boy named Josh. More than two decades later, Josh Levy, now 34, finds himself sitting atop Lewis’ empire, trying to navigate the fallout from the billionaire’s guilty plea to insider-trading charges in the U.S.
7) How much wealth you need to join the richest 1% around the world
Breaking into the top 1% of wealth in the U.S. is getting harder. It now takes at least $5.8 million to join the richest echelon in the world’s largest economy, almost 15% more than about 12 months ago, according to research from Knight Frank.
6) Two Sigma researcher fights hedge fund over blame for $170 million in losses
A Two Sigma Investments quantitative researcher pushed back against claims that his misconduct resulted in $170 million in client losses. The firm told investors in October 2023 that a researcher had made unauthorized changes to its quantitative models that led to the losses. Two Sigma didn't identify the researcher, but a Wall Street Journal story cited “people close to the matter” in naming him as Jian Wu.
5) Lalalli Senna describes how she keeps alive the philanthropic legacy of her racing legend uncle
Lalalli Senna is the niece of Brazilian racing legend and three-time Formula One champion Ayrton Senna. Before his death in an accident during the 1994 Grand Prix, Ayrton donated millions of his winnings to children’s charities. “The family values were to care about other people,” Lalalli told Crain Currency. “Ayrton as a child would give his things to anyone. He didn't care that much about fame or the image he had. He gave away a lot of money in secret.”
4) NFL succession crisis forces teams to let private equity in
For most of its more than 100-year history, the National Football League has operated as a closely knit collective of family businesses — and has taken steps to try to keep it that way. Under Commissioner Roger Goodell, who has held his post since 2006, the NFL has repeatedly adjusted its rules to make it easier to pass teams across generations, as average team values climbed to around $5 billion.
3) JPMorgan builds unit for world’s richest families in wealth bet
JPMorgan Chase & Co. has quietly built a global unit focused on catering to the ultra-wealthy and their investment firms as it looks to expand services to the world’s superrich. Created just before the pandemic and led by JPMorgan veteran Andy Cohen, the unit is called 23 Wall, and it focuses on about 700 families worth more than $4.5 trillion.
2) Paul Newman's heirs continue legal battle as foundation names new CEO
Amid a legal battle pitting two daughters of the late actor Paul Newman against his namesake charity, the Newman's Own Foundation hired its third lead executive in less than four years — new President and CEO Alex Amouyel. The lawsuit, filed in Connecticut Superior Court, alleged that the daughters have not been allowed to direct as many charitable funds as they'd been promised.
1) Just a billion doesn’t cut it on this exclusive Florida island
Ivanka Trump strolls past the lush green golf course, blond ponytail poking through a white cap, her back to the house she bought for $24 million and renovated. Next door is the mansion of superstar DJ David Guetta, down the street from homes owned by Tom Brady, Carl Icahn and Eddie Lampert. It’s 72 degrees and sunny in Indian Creek Village, a town for the ultrarich on an island off the coast of Miami, a perfect winter morning in Florida’s Billionaire Bunker.
Study: Family offices to boost outsourcing for liquid investments, concierge services
By ANDREW COHEN
Family offices plan to increase their reliance on third-party providers, especially for liquid investments, concierge services and wealth planning, according to new research from the UK-based financial services firm Ocorian.
Over the next three years, 77% of surveyed family offices plan to increase outsourcing for liquid investments. The same percentage said they would increase outsourcing for extended family tasks such as concierge services, while 78% will devote more outsourcing to wealth planning.
"What’s clear from other segments of our research in tandem with our experience is that family offices are increasingly adopting institutional-level governance and investment strategies, with a strong focus on professionalization and diversification,” said Annerien Hurter, global head of private client at Ocorian.
The survey separated family office responses by plans to “dramatically increase” and “increase” outsourcing to specific areas. At 44%, illiquid investments received the most responses for dramatically increasing outsourcing over the next three years.
“By outsourcing complex areas like private equity to outsourced chief investment officers, they can maintain control over liquid assets while navigating the challenges of illiquidity,” Hurter said. “As these offices become more sophisticated, the trend is clearly moving toward outsourcing more investment functions to access top talent and ensure greater efficiency.”
Ocorian’s international study garnered responses from more than 300 family office investors who manage a combined $155 billion in assets.
The study also found that family offices plan to increase outsourcing over the next three years for services across personal financial management, passion assets, family homes, philanthropy and document repository.
“It's essential for advisers and service providers alike to deeply understand the unique risk appetite and governance needs of each family, ensuring transparency and trust in every decision,” Hurter said. “The key to success for third party providers will be being able to offer a seamless global service.”
Related Reads:
> Should you outsource your family office? 6 questions to consider | Crain Currency
> Survey: Cost of operating a family office is rising | Crain Currency
LOOSE CHANGE
Private equity firms buy stakes in NFL: Arctos Partners has acquired a 10% stake in the Buffalo Bills, following approval by the NFL, while Ares Management acquired a similar stake in the Miami Dolphins.
Brotherly battle threatens family fashion outfit: Alberto Makali founder and designer Albert Malekan has accused his younger brother, Michael, of trying to steal his business. Michael asserts his brother has made a mess of things and a judge must strip him of control.
Homrich Berg grows family office unit with acquisition: The wealth management firm has acquired WMS Partners, a registered financial adviser and multi-family office managing $6.4 billion in client assets, and will operate it as part of the HB Family Office.
Help us with a story: We’re working on a story about investing in preventive health care. If you have any comments on the topic, reach out to [email protected].