Is Direct Investing Right for Your Family?

At EisnerAmper’s 2018 Private Wealth and Family Office Summit, one of three breakout sessions held was dedicated to the intricacies of direct investing combined with the various dynamics of a family office.  Panelists John Bradley (managing director of Torreya), Rafael Romero (principal, Emigrant Capital Corp.) and Michael Schwamm (partner, Duane Morris, LLP), and moderator by an EisnerAmper Partner, advised that family offices should invest in businesses which they know well and understand. Additionally, contrasting with venture capital and private equity investing, the family office usually sets no time horizon for selling, but should consider milestones for when to sell. Their investments may have been made with more than one purpose in mind -- for example, serving a positive social function such as investing in an environmentally friendly business in addition to bottom line considerations.

Further, the panel discussed that one approach they are seeing more frequently with family offices is co-investing, which allows the family office to better compete for investments.

The expert panel also touched on due diligence and the need to know when to walk away from a deal, and such considerations as reputational risk and potential liability based on the type of business under consideration.

For more content stemming from EisnerAmper’s 2018 personal Wealth and Family Office Summit:

Intergenerational Issues and the Succession of the Family Business: Real Life Stories from Family Members

For more content stemming from EisnerAmper’s 2018 personal Wealth and Family Office Summit:

• Is Direct Investing Right for Your Family?
• Intergenerational Issues and the Succession of the Family Business: Real Life Stories from Family Members
• Implications of the Increasingly Globally Mobile Family
• Cybersecurity at a Glance