June 5, 2023: How to tell if a family office conference is worth it
Conferences and events have always played a pivotal role in wealth management. They’ve been known as places to hear new ideas, connect with industry peers and stay up to date with regulations and accreditations. But today, with ever-changing office structures and remote working, family offices often wonder: Is it really worth my time? Alec Foege investigates why people chose to go to one event over another and how to decipher the caliber of each.
Also in this issue, we sit down with Cresset Asset Management’s new president, Liz Nesvold, to discuss how the firm continues to evolve and expand its reach. As a longtime industry fixture, Nesvold has learned the nuances of wealth management. Here she shares how she plans to focus on helping founders, entrepreneurs and multi-generational family businesses.
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: How to tell if a family office conference is worth it
By ALEC FOEGE
In-person family office conferences are making a comeback post-COVID — and family office professionals have become more discerning in which ones they attend. The best events are prized for their content-rich panels and global networking opportunities; the worst drop family office professionals into a shark tank filled with service providers.
“People are working harder, so everyone is trying to find a kind of equilibrium. They don’t want to stand around cocktail parties and see how many business cards they can collect,” said Steve Prostano, a partner and head of family advisory services at PKF O’Connor Davies. “These days, it’s much more about adding value to their lives.”
Greg Friedman, chairman and managing director at Greycourt, a family office advisory firm, said a majority of his clients — “typically the investment professionals, not the family principals” — will attend conferences geared toward family offices. “They range in quality," Friedman said. "And by quality, I mean the quality of the speakers, the quality of the topics and the perspective on marketing, which is a big one.”
The importance of attending conferences depends on how experienced attendees are in the world of family management, Friedman said. “Maybe it’s someone who was the treasurer at the founding corporation but is now running a family office,” he said. “A good conference will include information on the investment side, the legal side, the tax side, educational materials that can be quite valuable because they’re learning.”
But for families who have been at it for a while, “the information conveyed at these conferences is, in my opinion, not highly useful.”
Understanding the mission and purpose of the group running a conference is the key factor in determining its practicality, Prostano said. Taking a look at the membership of that group can also offer some clues.
“Who is the organization targeting? And who are the attendees going to be at that conference?” Prostano said. “A family office should really assess what are the needs or the challenges they’re facing, and then look at the agenda and see whether the content that’s going to be provided is really going to address those needs.”
TREND TOWARD TRANSPARENCY
For decades, family offices kept a low profile and prided themselves on their discretion. The thinking was that managing a family’s wealth was a uniquely private affair.
“Historically, family offices were confidential and sometimes clandestine,” said Steven Saltzstein, founder and CEO of Force Family Office, a firm that hosts events for its network of family offices. “But the more family offices become institutionalized, they’re realizing it just makes more sense to be out in the open so they can talk to other family offices about investment opportunities; talk to the sell side about funding, co-investment opportunities; or just speak with operators of companies they may want to buy.”
The new openness in the industry is in part due to the recent surge in the sheer number and valuation of family offices. There were 7,300 global family offices in the second quarter of 2019, a 38% increase over the previous two years, per a Mordor Intelligence survey. According to Arizton, the global family office market was valued at $14.87 billion in 2021 and is estimated to increase to $21.11 billion by the end of 2023.
“There are just so many more single-family offices and multi-family offices,” said Saltzstein. “I think their goals in attending conferences are to do kind of a sector check, to share deal flow, to meet new family offices and create new co-investment relationships.”
PEER-TO-PEER INTELLECTUAL EXCHANGE
Greycourt’s Bernstein agrees that family offices have become a big industry. As that industry expands, so does the talent available to run them. He believes conferences are a great way to get familiar with what professionals are available.
“The people you hire to run your family office, in most cases, have run other people’s family offices,” he said. “Everybody is interested in learning.”
When wealth preservation is the goal, as it is with intergenerational family offices, having the latest knowledge on topics such as artificial intelligence or cybersecurity can be crucial in passing on assets to one’s descendants.
“Not only is the world changing,” said Saltzstein, “but there is a shrinking ice cube. The more kids there are in the family, the more grandkids, the more assets need to be distributed.”
Cresset Asset Management expands its reach
By MARCUS BARAM
Cresset Asset Management, one of the country’s largest multi-family offices, recently made two major moves — merging with TRUE Capital Management and hiring Liz Nesvold in a new role as president.
The merger with TRUE creates a firm with nearly $33 billion in assets under management. TRUE’s multi-family office features a roster of clients across sports and entertainment as well as entrepreneurs, including Deandre Ayton of the NBA’s Phoenix Suns, former NFL running back Marshawn Lynch, recently retired Major League Baseball great Albert Pujols and Nneka Ogwumike of the Los Angeles Sparks of the Women’s National Basketball Association.
"When we first met the TRUE team several years ago, we found kindred spirits in terms of how we believe clients should be treated and the positive impact wealth can have," said Avy Stein, the co-founder and co-chairman of Cresset. "Our mutual dedication to providing access to a full suite of sophisticated family office services and private investment opportunities makes this an ideal partnership."
Nesvold, who launched and built the investment bank Silver Lane Advisors and was honored with the M&A Advisor Leadership Award in 2021, will oversee Cresset’s strategy and offerings for founders, entrepreneurs and multi-generational families.
Nesvold told Crain Currency that in her first 100 days, she plans to go on a listening tour to understand the business and “to think about the way we serve our clients, how we do what we do, because the client is at the center of everything.”
She sees the family office world and wealth management industry at a “wonderful inflection point,” with the migration of clients into the independent RIA movement and “a lot of receptivity for the services we offer to client families.”
With the bank and economic turmoil of the past year, Nesvold sees an opportunity for Cresset — “for families to feel safe and protected, we offer a safe haven and a holistic view of the full of their office needs and financial lives,” she said.
As one of the more prominent women leaders in a male-dominated industry, Nesvold is eager to bring women up in finance, an industry “which doesn’t make it conducive for them to stay the long term.” She wants to “use this as a platform to help in terms of leadership of young women and young people of all shapes and sizes, to have good mentorship opportunities to find a career in finance and in wealth management. That will be my way to give back.”
Family offices gave major salary bumps in 2022: Almost 58% of staffers at family offices — from personal assistants to principals — got a raise in 2022, with 20% of them getting a salary bump of 15% or higher, according to a new survey by KPMG. In addition, 41% of family offices surveyed expanded the size of their teams in 2022, and 40% of them plan on hiring in 2023.
Are you prepared for generational wealth transfer? Probably not: Most of the 230 global family offices surveyed recently by UBS in an annual report say that one of their primary goals is to support the transfer of wealth from one generation to the another, but only 42% of them have a wealth succession plan in place for family members.
Chinese family offices under greater scrutiny in the U.S.: Chinese family offices are coming under greater scrutiny when pursuing investment opportunities in the U.S., likely because of national security concerns and increasing tensions between the countries, Private Equity International reports. But that hasn’t deterred the interest of private equity firms in these investors.
Help us with a story: We’re working on a story about the art market and how to make sure that families make smart decisions when handing down those assets to the next generation. If you have any comments on the topic, reach out to [email protected].