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Direct Investing: Opportunities and Alligators

Ethan Boothe, partner-in-charge of EisnerAmper's Dallas office, moderated the first session of the 2017 Family Office Super Summit, which was held in Miami on December 4-6 and hosted by the Family Club. The panel included Andres Bethencourt (Amzak), Ira Perlmuter (T5 Equity Partners), Cliff Oberlin (Oberlin Wealth Partners), Pierre duPont (HPM Partners) and Brian DeLucia (Arrivato).

The session, "Direct Investing: Opportunities & Alligators,” covered private equity deals and related considerations.

How do the panelists find the deals that make their day? Basically, they find them through networking opportunities in the major markets, such as New York City. They also seek out other families, attorneys, accountants and regional bankers. The panelists noted that it is important to carefully cultivate prospects and be out in the public eye to help attract opportunities.

What resources do you need when looking at deals? One idea is to invest in a private equity deal and then co-invest in other opportunities that may arise. Also, have a team of professionals (e.g., an industry specialist, an in-house person to vet deals, an accountant and an attorney) with the appropriate expertise. Take the right amount of time to nurture these relationships, and keep any messaging simple and to the point. Doing your research is paramount. One panelist discussed his three-minute rule: If he cannot understand what someone is trying to accomplish within three minutes, it probably is not a good deal.

Finally, the panel discussed the family office trend of doing direct investing rather than investing in funds. It is important to have a PE expert in house to vet these deals. The event left attendees felling more informed amount seeking opportunities and less vulnerable to the alligators.

Marie Arrigo is a Tax Partner and Co-Leader of the Family Office Services Practice for the Personal Wealth Advisors Group which provides tax consulting and compliance services to family offices, individuals, trusts and estates, and closely held businesses.

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