Salem Abraham has been involved with a family office for nearly 35 years, though he never really called it that. He just knew that he would be working with his grandfather — Malouf “Oofie” Abraham, a second-generation Lebanese immigrant — who had been investing family assets in ranching, real estate, and the oil and gas industry for decades around their small town of Canadian, Texas. On his way to learning the craft of dealmaking from his grandfather, he took a detour into the world of managed futures. Salem, a finance major at the University of Notre Dame, became fascinated with systematic trading while in school after a chance meeting with Jerry Parker — one of the legendary Turtle Traders taught by William Eckhardt and Richard Dennis — and was determined to start his own commodity trading adviser (CTA).
Salem’s grandfather was not impressed: “Of all the ways to lose money, why did you pick the fastest?” Nevertheless, he provided some seed money to the venture. But his grandfather’s parting shot echoed in his ears: “If we lose half the money, we are going to throw that damn quote machine out of the window and stop that commodity trading nonsense and get back to real business.” Salem accepted the challenge, persevered, and the CTA became successful.
One of the first trips he made in his new business was to the ranch of legendary oilman T. Boone Pickens. This meeting began a long friendship between the two — who would later partner on the philanthropic Pickens-Abraham Foundation, which provided school funding and scholarships in the Texas Panhandle.
We spoke with Salem regarding family offices, from his time apprenticing with his grandfather to running his own office.
How do you define success as a family and as a family office?
To me, success is making a difference in the world.
In our family, there is a real understanding that at some point, you are dead, and all this is going to belong to someone else. At the end, you’re broke; and at the beginning, you’re broke; so don’t get too hung up on the money. My great-grandparents, Lebanese immigrants, ran a store. As a family, there is a real understanding that there is an interconnection between you and the community. If the community is not doing well, you don’t do well as a store. You are involved with the community, you have to help your community, make it better; you have to get involved. People in the community need to step up and volunteer their time and their talents and their treasure to help and do their part.
Different problems need different people and different talents and different amounts of money. That’s success to me, to see our family make a difference for good, and each generation does their part.
What’s the latest purposeful investment you’ve made, and why did you do it?
My latest is an oil and gas deal. Normally, I don’t invest much in oil and gas, but I don’t see anyone else doing it. I have [rarely] made money with the crowd, and [currently] the crowd does not want oil and gas. But I have wind [energy investments], and I have honeybees. I currently have about 100 honeybee hives; I’m trying to get it up to 1,500. The honeybee stuff is fun and interesting — agriculture does not make money, agriculture is a bad living; but it is a good way of life, so that counts. Moneywise, the biggest deal I got today is oil and gas and my mutual fund.
I am trying to do a green hydrogen deal — but go try and do an ESG project and make money. You can want to do it all you want; it’s like growing a tree fast. Grow a 50-foot oak tree overnight, it’s not going to happen. Same with ESG. We have to get a lot of infrastructure, and it goes frustratingly slow.
Who has helped you the most in building your family office?
My grandfather. He told me the first week I arrived, “I want to teach you some things, I hope you learn from me, I hope we make some money, and I hope we have a fun time doing it.” And we did all of those things. He was fun to hang out with. He was really smart, and I knew I was really smart, so it wasn’t intimidating to me — a lot of families can’t do it. The book The Big Rich: Rise and fall of the Greatest Texas Oil Fortunes looks at three big rich families in Texas. There is a danger of family offices where you have people stuck together. You’ve got to let people have independence.
It [was] like an entrepreneurial greenhouse, where you are safe to try things and to get smarter at stuff. You learn how to be an entrepreneur from entrepreneurs. You get to learn how to do deals. You learn what makes sense and what doesn’t. Sadly, it takes about 20 to 30 years to see all the dumb things you can do. You have to live a long time and be healthy, because you have to use all those lessons as you get older.
What do you wish you knew earlier in terms of your family office?
Nothing, really; it’s like a journey. You don’t want to skip ahead in a book. To know how the book ends as you go through it wouldn’t be any fun. I’ve enjoyed the journey; there is nothing I wish I would have known.
I’ll say this: It is important to show up smart. You want to have a good education before you show up. You need a good bucket of knowledge and a basic understanding of business. Getting a good college education is helpful to show up with. You’ve got to show up with basic knowledge of business where you’ve got something to build on.
I knew tax law, and I knew business law, and I knew finance. To be on a baseball team, you need to know how to catch a ball, throw a ball and bat. You have to have some skills. Show up ready to play. The people who show up to a family business just because they are family — and they have a history major, [which is] nice — are going to show up behind and not be as helpful.
If you could turn the clock back 10 years, what would you do differently?
The best part of a family office is the journey, the growth, just how things evolve. When a generation leaves and a new generation shows up, and you see your place in the overall arc of history differently as you get further down the road.
Every part of it is fun. It is fun to show up and be the idiot new person that is learning, and it is fun to know your way around, and you can start teaching the next generation. It is fun to be the apprentice; it is fun to be the master.
Interview by Daniel P. Collins, a financial media professional with more than 20 years as a writer and editor. He has expertise covering exchanges, financial markets, regulation and alternative investments.