How to Raise Capital from Family Offices

Family offices are notoriously discrete. So much so that one of the most common adages to describe the industry is “a submerged whale does not get harpooned.”

But someone must be Ishmael. With a tremendous amount of investable capital, these offices are often looking for ways to diversify their investments. While public markets, traditional investments, and real estate are common avenues, a recent article highlighted the growing relationship between single family offices and private equity.

To capitalize on this favorable change in the tide, it would be worthwhile to (re)start your outreach to this notoriously hidden family wealth. According to Richard C. Wilson — the founder of the Family Offices Group — just because the offices are hidden does not mean they are unreachable. He explained that relationships with single and multi family offices can be cultivated through diligent, persistent, and intelligent outreach.

Below are a few methods to begin your family office outreach:

Have a Proactive and Diversified Outreach:

According to Wilson, the most effective outreach strategy requires both persistent and proactive outreach. Even for the specialized Family Offices Group, building relationships still requires a variety of different channels and techniques. Wilson explained, “We use a variety of tactics — probably around 30 different strategies — to attract family offices. We speak at conferences, write books, publish newsletters, maintain a website, run an association, offer a training platform — and that is just the tip of the iceberg.”

Moreover, diverse outreach also entails tailoring your conversations to the specifics of different family offices. Although there are general categories of offices — small single family offices, large single family offices, small multi family offices, and large multi family offices — Wilson emphasized that each firm is unique. “There is no singular template. Each family office has its own system — different sized teams, different missions, and different values.”

Immediate results are not guaranteed, even with quality and diversified outreach. Quality conversations will take time to develop. As Wilson explained, “We talk with family offices every day and meet with them face-to-face every week, and it still takes a long time to generate solid relationships, raise capital, or organize club deals.”

Begin Locally

While Wilson, through his Family Offices Group, is able to dedicate the time and resources to cultivating a multitude of outreach channels, it can be unrealistic to assume that any more generalized firm can mimic such effort — especially with capital and time spread among other opportunities.

If you are looking to connect with just a few family offices, the best place to begin is in your own backyard. According to Wilson, “the best method is to begin locally.” These family offices are usually the easiest to initially meet. He explained, “You can focus on getting to know every single family office in your city.” With this base network, you are able to use it as a foundation for further outreach and referrals.

But what happens if you do not know any family offices in your city or region? After all, they are submerged whales. Wilson suggests Google as one of the best places to begin the search. “If you don’t know any [family offices], start by searching Google. You will probably discover at least 2 or 3 in your area.” Wilson recommended that your Google search simply include your area (i.e. Denver) and the phrase “family offices.” Alternatively, you could search for the ultra-affluent residents of your area, and search for an associated family office.

Once you have this foundation, continue to foster the relationships by attending conferences and events. “Eventually, through these efforts and through networking, you will grow your network.”

Have a Value Add

According to Wilson, the hardest part of the relationship is maintaining it. “After the relationship is started, the hard work arrives. You must demonstrate that you will provide clear value to the family office.”

Wilson’s value add is his specialty and focus on family offices. He explained, “When I recently wrote The Family Office Book: Investing Capital for the Ultra-Affluent, I spent a great deal of time ensuring that it was very valuable. I knew that if I made it outstanding, family offices would reach out to me; if it was just mediocre, they would not.”

The same principle must apply to your outreach and relationships. Demonstrate to the family office why your firm is the right one to be in contact with. What can you offer that no one else can — Is it a strong track record? Exceptional due diligence skills? Experience and insight within a relevant industry? Whatever the skill, emphasizing the trait is a critical component of securing the connection.

The Light at the End of the Tunnel

Ultimately, the extra effort required to build relationships with family offices is more than warranted. Family offices bring much more than investable capital to the table — a stable relationship with one can offer the power of a warm introduction and a broader network. As Wilson explained, “Many of these family offices are connected with ultra-wealthy family offices and leaders in a variety of businesses.”

He continued, “One family with which I work — a 6th generation family in San Diego — has helped connect me with a variety of Boards of Directors of publicly traded companies. These relationships can help facilitate corporate acquisitions and other investments.”