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Despite the fact hedge funds and other alternative investment firms have the preconceived notion that marketing to family offices is easier than targeting other investor groups, family offices are indeed highly sophisticated and managers need to take the proper approach when interacting with them by seeking to form a long-term partnership.

Marketing to Family Offices

Despite the fact hedge funds and other alternative investment firms have the preconceived notion that marketing to family offices is easier than targeting other investor groups, family offices are indeed highly sophisticated and managers need to take the proper approach when interacting with them by seeking to form a long-term partnership.

At this month’s EisnerAmper breakfast series solely for fund managers and investors, a trio of panelists shared their views on how fund managers can be successful in receiving allocations from the different family office groups, including the steps they need to take to get in front of them.

What is a family office?

Generally, once a family has achieved $50mm+ of net worth, it makes economic sense to create a family office and begin to internalize many of the investment functions and create a more efficient platform for the family.  There are two types of family offices:

  • Single Family Office (SFO) is usually an organization that manages the wealth of one family. 
  • Multi-Family Office (MFO) is usually an independent organization that supports multiple families to manage their entire wealth.

Marketing Strategy:

Hedge funds and other alternative investment managers need to have dedicated marketing plan when targeting family offices. They must continuously expand their network in the space by attending industry events, visiting regions that aren’t as heavily marketed as the major financial centers and to provide value-added intelligence to these family offices as it should be viewed as a “partnership” with them, not a commoditized relationship.  These relationships take time to build trust and paying it forward can prove to be beneficial to those managers willing to make that commitment.

Fund Terms:

The consensus from our panelists is that if a family office is going to invest in a fund manager during the early stages of their life cycle that preferential terms will be required.  These terms may include, but may not be limited to:  fee discounts, preferential liquidity terms and capacity rights.  It is suggested that newly formed funds should offer a Founders Class that encompass these terms and align their interests with these highly-catered-to investors.

Investment Outlook

In addition to making investment decisions, family offices have other priorities including governance, philanthropy, reporting, operations and taxes. However, when it comes to their current investment outlook, uncorrelated strategies are quite popular given the volatility experienced this year in the equity markets. As a result, market neutral equity, options volatility and global macro/CTA strategies have garnered a great deal of interest.

Benefits of Family Offices:

Because of their longer term views and permanent capital base, family offices are a great investor for alternative investment managers to build up their roster of investors. Family offices are generally open to sharing their investment views as they are not competing against other family offices and this fosters a mutually beneficial relationship within the family office community and their investment managers.

EisnerAmper would like to thank the panelists for their time and insights they shared at the breakfast:

  • Patrick J. McCurdy, Managing Director and Head of Capital Introduction, Wells Fargo Prime Services
  • Andrew Saunders, Senior Managing Director, Castle Hill Capital Partners
  • Ronen Schwartzman, Founder and Chief Investment Officer, Ten Capital Advisors


Stay tuned for the next breakfast November 18th on “Women and Minority Investing.”

Frank Napolitani, Director, Financial Services Group has nearly 20 years of experience working with organizations including a fund of funds, family office and prime brokerage firms, and providing consulting to investment fund managers.

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