Ronald Diamond - Founder & CEO of Diamond Wealth | Reinventing the Way Family Offices Invest

Welcome to success story. I'm your host Scotty Clary. The success story podcast is part of the HubSpot podcast network, which has other amazing podcasts like Business Made Simple hosted by Donald Miller. Business Made Simple takes the mystery out of growing your business, so make sure you tune in wherever you get your podcast. Today, my guest is Ronald Diamond, longtime investor and entrepreneur. Ron Diamond is the founder and chairman of Diamond Wealth. He represents over 100 family offices ranging in size from $250 million to $30 billion. Diamond Wealth invests in private markets, including private equity, venture capital, and real estate. In addition, Diamond Wealth has divisions that focus on philanthropy, wealth transfer, investment banking, social impact, and governance. Earlier in his career, he founded Pinnacle Capital, a $250 million hedge fund that outperformed the S&P Index 10 out of 10 years for ultimately selling his company to an international investment firm. Previously, Diamond served as Senior Managing Director at Bear Stearns and he began his career as an analyst at Drexel Burnham Lambert. He serves on the advisory board of 10 privately held companies and acts as chairman for four of them. He is also chair of two Tiger 21 chapters in Chicago and chairs a newly created family office group for Tiger 21. He is the past chairman of the advisory board for the disruptive technology and digital cities program at Stanford University and taught classes in the entrepreneurship program at Stanford. I was 24 years old. I was sitting in a room with a group of extraordinarily successful people at Drexel Burnham. Drexel Burnham at the time was the most profitable firm on Wall Street. Fred Joseph, the CEO, came into the meeting. I was a trainee at the time and he announced that Drexel Burnham was going bankrupt. So I'm literally in the room with the 10 kids from my training program. We're all 24 years old. It didn't impact us much because we didn't have stack options and we lost a good job. But I'm literally watching people in their 60s and 70s and many of them were openly weeping. And on Wall Street, certainly in the 70s and the 80s and 90s, that typically didn't happen. Many of the people lost most of their money at Drexel. It was a surreal moment, but my takeaway from that was I would always be loyal to people, but not to a company. Because if this could happen to Drexel, this could happen to anybody. So as a result of that, my plan initially was to stay Drexel for 50 years and hopefully run one of the divisions that fell apart two years later. So my basically, I moved back to Chicago. My father was six. I did move back to Chicago and I ended up starting a hedge fund. But that was not what the initial plan was. And walk me through starting a hedge fund because anybody is listening. That's a very daunting task. So you just, yeah, it sounds more daunting than it really is. You basically, as long as you have a group of investors that have confidence in you to give a small dollar amount of money, you don't have to open a hedge fund with a huge dollar amount and we didn't. I had several people that I've known most of my life and I've done fairly well in school and they had confidence in me to give me a small dollar amount of money to see how I would do. And if I did well, they'd maybe give me more. That's kind of how we got started. It'll ultimately grew and we had very good performance. But to get started, we just called an attorney. We structured the documents. I found some investors. We had enough money to get started and then we got started. I didn't know what I was doing. I mean, literally, you just do it as is. In retrospect, I kind of laughed at that whole period of my life. But I didn't know enough to know that you shouldn't start a hedge fund right away. But I did and it worked out fine. I feel like I feel like that's a good entrepreneurial lesson. I think sometimes the people that are successful are the people that don't know any better and they just do it. As somebody who built a fund, curious about how you decided investment thesis, how you decided what strategy you would take. It was obviously learning as you go. But if anybody who's listening to this, which is probably a more complex topic, a lot of the people that listen to this podcast and more entrepreneurs, but this is a business at the end of the day. If anybody ever wanted to emulate you, what are some tips advice for somebody else starting a fund? Well, don't emulate me as a person. But as far as the fund is concerned, we were pretty good stock pickers. We had some proprietary models. We never had huge returns. We never had 40, 50, 60% returns like a lot of the hedge funds. And remember also when I had the hedge fund, this was very early in the hedge fund era. I mean, back then it was in the 90s from 1990 to 2000. So people used to think you can make money in an up market or a down market that's the term hedge fund. That wasn't the case. You're either good at one or good at the other and we were pretty good at picking stocks. We also had a lot of luck because in the 90s, you had a bull market. And so it wasn't that challenging. If I did my exact same strategy from 2005 through 2010, I would have gotten clever. So we were pretty good at what we did, but there's an element of luck and timing, which is critical. And I think that's true with any entrepreneur and certainly true with me. And when you build this out, what's the exit plan? So following your career a little bit longer, you built this out to what level, what assets under management, how long did you do this for, and then what did you do after? So we ran it. First of all, I didn't have an exit, it's not like a company where I had an exit plan or an exit strategy where I was going to hold it for five years and then sell it. We built, I started in 1990 and I sold it in 2000. So I ran it for about 10 years. We ran about 250 million dollars. And again, we never had huge returns. What we did have, though, was consistency and we beat the S&P 10 out of 10 years. Our clients were happy because if they're up, markers up seven, we're up eight and a half, they're fine. In the 90s, they didn't call them family offices. They called them rich people and now they call them family offices. That's kind of how I got into the business of family offices. So I had all these rich people who are not called family offices. And we basically invested. We picked stacks that we thought would go up. We were pretty good at it. We had big tailwind behind us. And in 2000, I felt the market was over value. I sold the company to a market neutral fund. I brought 100% of the assets over, stayed on for six months. And then I just took a year off, started doing some traveling, got into yoga, meditation, and then after about eight months, I just couldn't do it anymore. So I needed to get back to work. And then, okay, so then when obviously that's an interesting exit, you have a liquidity event. Now, what's next for you when you want to build something from scratch again? You could have started another fund. Obviously, you've done that once before. But now you operate in a slightly different way. So explain your thought processes to after a liquidity event from selling a fund. Where do you position your time? You could build a company, you could build another fund. What do you do now? Well, it was my plan was to start a private equity firm. And while I was planning that I wanted to invest. So I like to invest in private markets, which is private equity venture capital, real estate, credit, things like that. And so basically, what I did was I would just make small investments in those different asset classes. And I also like to do the direct deals rather than investing the funds. So I would do that. And then my thought process was I want it to be typically if there's a very attractive deal, private equity venture capital, real estate deal, typically whoever owns that deal, they're going to usually call their number one or their wealthiest clients first and then kind of go down the list. I didn't have enough capital to be the first call, but cumulatively I did. So basically, what I did is I went to the family offices that were with with me before when there were just rich people and other family offices. And I said, I'll put a small dollar amount in. I'm going to put one or two million dollars into a direct deal. You could put 40, 50, 60 million dollars cumulatively. We work with about 100 family offices and these are families ranging anywhere between $250 million up to $30 billion. So they put the big chunk of the money in there. And as a result of that, I now have enough money to be the first call. So I call it first call alpha. We don't charge anything, but I'm not doing it for a self list purpose. I do it self-ishly because without their money, I wouldn't be the first call and get the great deals. And it also does benefit them because I am doing some diligence and there's some value out that I'm doing acting as the fund. So that's kind of what we do right now. And actually, now that I think about this structure, can you actually help me understand why you didn't just start that private equity firm because then all these rich people family offices, they could have been LPs? True. I can't give you a real reason for it. I started investing. And then my thought process was, as I started investing, and before I started in the private equity firm, I realized that what I've done by doing what I call first call alpha, I love doing it. So I was pretty good at it, and I love doing it. So if you're pretty good at something and you love doing it, that's really what you should do. So that's kind of how it happened. So it wasn't like a grand scheme that I had a great idea. It was just serendipitous. And okay, so then what does what does the business look like now? So just describe like who you work with, what the actual, it's because it's now it's matured a little bit. Right. So I've hesitant to call it a business. So basically what we do, we invest, I invest my own capital, which is a finite amount of capital. And we work with about 100 family offices. These are families anywhere between 250 million to 30 billion dollars. And we look for the private upmarked private deals, private private equity, venture capital, real estate credit. I kind of act as a funnel. So if I see a private equity deal, I know 17 families that love that type of private equity. If it's a cannabis deal, there might be six people. If it's a multifamily real estate deal, there might be 70 people. So I kind of know who likes what. When I see a deal, I will look at it, diligence it, invest it myself, and then I'll go to my network. And if they want to invest in it terrific, if they don't, that's fine. But I know what everybody likes. So I'm not going to go, if somebody doesn't invest in early-stage venture, I'm not going to show them an early-stage venture deal. If somebody doesn't invest in multifamily real estate, I'm not going to show them that. So I kind of know who likes what. And I show them the deal. And as a result of that, we'll structure an SPV, which is a special purpose vehicle, and come in and just invest. And we typically can get better economics because if you come in investing $50 million, you can more become part of the general partner and you can dictate terms a lot better than I could if I can only put in one or two million dollars. So that's really why we're doing it. Why I'm doing it. And so now you've worked with all these rich people turned family offices. And I know that's like the majority of the focus of your work. So walk me through, I guess, even the history of the family office because I think people understand venture capital. They're everywhere. People understand even more private equity means they've heard the term hedge fund before. Family office is like it's everywhere, but nobody quite understands what it means. Including people in the industry. So in the US, it probably started at Rockefeller, maybe 1875, and Europe had started way before then. You could go back to Akbar, they're great. I mean, so I mean, go back hundreds and hundreds of years. But basically when you hear the word family office, most of the family office, 68% of family offices that are in the systems today started since 2000. And half of those started since the crash of 2008. So let's kind of bucket this is the family offices really as people know it today, most of which started after 2000. So this is a relatively new phenomenon. The interesting thing about the industry and the fascinating thing about the industry is I believe that as private equity and venture capital disrupted the public markets in the early 90s because it was a superior model. If you have a company and you better report to a guy like me or other analysts every 90 days, it's hard to run a company long term. So the reason private equity and venture capital exploded was because it was a better model and it was better model because 2% I'm only paying for the overhead and 20% I only make money if you make money. So that model made more sense in general than the public markets where you had to report every 90 days. The market exploded. What happened is and again, I'm generalizing because I put money, I do have money in private equity funds and venture capital funds. But in general, they bastardized the business and it became an AUM game. And what should be a $500 million fund became a $5 billion fund. And I'll give you a specific example which I think is a microcosm of what's happened to the industry and why family officers started to disrupt private equity and venture capital. A friend of mine rolled up a logistic role of logistics companies and he went to a placement agent in New York and he needed about 150 million. Placement agent based on his track record was actually able to get him close to 500 million. My friend said to reflect I just need 150 and let's get started. The placement agent literally came to his house in New York and wrote down on paper 2% of 500 million equals X. 2% of 150 million equals Y. What am I missing? And my friend was a bit incredulous. He goes here's what you're missing. I won't have another fund if I do what you want me to do because I can't deploy 500 million. I get to play 150 million perfectly very efficiently but the other $350 million I can't deploy that well. Now I'm smart enough to know that 2% to $500 million I'll make more money today but it's not going to help the performance of the fund. So again I'm generalizing but this is a microcosm so these private equity firms and venture capital firms have become massive and it's become an AUM game and it's become an inherent conflict of interest in many instances. Family office is the biggest advantage they have is something called patient capital. Patient capital is they don't have to sell. So if you look at it from a macro standpoint the private equity in the venture capital firms which I believe in general are better models than the public public companies. They're compensated to turn companies over every three to five years. Irrespective of how we're the company that that's how they're compensated. That's not necessarily the best way to create long-term wealth. So if you look at what happens in a lot of the markets it's typically private equity from A sells the private equity from B when they do well and sell the private equity from C until somebody doesn't do well right. So there's so much money out there family offices. So if you look at a company that's been spot and sold three times over 20 year period and then you look at a family office who bought it once held it for those 20 years. Didn't have to pay the taxes. Didn't have to pay the transaction costs. Didn't have to figure out ways to redeploy the money. It's a much better deal right. So patient capital is the by far the biggest advantage the family offices have over private equity in venture capital. Now having said that they're not going to replace private equity in venture capital because private equity in venture capital are huge industries and they're going to continue to grow. All I am saying is that they're going to start to disrupt them because there is a better alignment of interest. So let's say you're an entrepreneur and you've got a great idea for a widget company. What used to happen did you go to Sequoia or NEA or one of these big venture capital firms and you're like terrific. I'm funded by this huge venture capital firm and you're set. Here's the problem. If you're that entrepreneur you're one of 20 portfolio companies right within the fund. Let's assume it takes three years or so to make traction and then you think your company's about to hockey stick up. You're 120th of the fund. They might decide even though they might believe you're about to hockey stick up that they want they want to bring in somebody else so they could sell you even though it might not be in your best interest so you don't really control that right. The venture capital firm does and remember they're trying to turn money over every three to five years. It's a better model for the entrepreneurs to partner with the family office. The problem is that the family office market in general the world that I'm in is very fragmented, very inefficient and very siloed in general that's starting to change and your starting to see family offices become more institutionalized. So the statistics are 25% of family offices would make it to the second generation. 10% make it to the third and 5% make it to the fourth so the model doesn't work and why is that? Well part of the reason a large part of the reason is because if you look at who has these family offices it's the guy who sold beanie babies. It's a guy who started five hour energy or guest jeans or Georgia perfume or a chain of gas stations. They have a liquidity event for a billion dollars. It's a totally different skill set to sell beanie babies or guest jeans which I couldn't do than to take a billion, grow it to two, not spoil the kids, do some estate planning wealth transfer and grow the asset base. So you've got huge amounts of capital in general very inefficient hands. The market today in family offices ten trillion dollars in capital in family offices. There's currently four and a half trillion dollars in capital in the hedge fund space worldwide combined. That's wild. In the next 15 years you've got sixty five trillion dollars it's going to transfer from the baby boomers to the next gen. This will be the largest transfer of wealth in history. As a result of that family offices in the next ten years will be larger than private equity and venture capital combined. So the market is massive. The problem is that it's a new industry it's inefficient it's fragmented in silo. So what's starting to happen and I think we're in the third inning maybe the top of the fourth but we're still early in this that family offices are starting to become more sophisticated. So you look at what the Pritzker is. It's a Paul Carbone as a friend who run the Pritzker family office. They've institutionalized it. You look at what Michael Dahl's family office. What does that mean when you say to institutionalize? What is it? Oh in other words basically you've got a family office now that has a huge pool of money but they run it more like an institution. So when you hear the term family office everyone thinks of something different. A lot of people might think of Michael Dahl or Michael Bloomberg. Billionaires or Ross Perot who made a lot of money. Most family offices today are not like that. Most of them are much smaller and most of them are not really run efficiently and they because the founder made a tremendous amount of money he or she made a lot of money in whatever business they were in. It doesn't necessarily translate to I can now take invest and do that well. So you've got a lot of people right now with a tremendous amount of money that are at least in my opinion and over their heads. In order for it to make economic sense to start a family office and again I'm not right this is just my opinion. You need a bare bones minimum of 250 million in order for it to make economic sense if you can invest in the private markets, private equity venture capital credit real estate. Some people would argue 500 million. There's a ton of family offices that are a lot less. Those family offices those families that are much less than that they're much better off going to what's called a multifamily office. So I want a touch on what a multifamily office is and how that's grown. You started 50, 60, 70 years ago you had the wirehouses. Now the problem with the wirehouses in general is they're technically not even fiduciaries which is mind-boggling if you think about it. As a result of that over the last 10 to 15 years something called RIAs which are registered investment advisors came to fruition their fiduciaries which means they have to do what's in the client's best interest right. So the growth in RIAs has exploded over the past 10 to 15 years. On top of that you have the multifamily offices all that is it's an RIA that looks at things holistically. So they're not just trying to create alpha they're also looking at a state planning wealth transfer philanthropy next gen succession that's all that is. So you've got the wirehouses is model one. The next iteration is the RIAs which was a better model because they're fiduciaries and then on top of that which is the best model is the multifamily offices. There's a lot of family at people who are running single family offices that in my opinion would be better off in multifamily offices without the amount proper amount of capital and without the amount of talent to do that you're better off to the multifamily office. Now having said that let's assume you're the preachers of the crown to the dolls or the bloombirds the world. Yeah you can institutionalize it. So they pay these people and you have to remember you have to pay for count. So one of the problems with family offices and again I'm generalizing but if a family office pays somebody five hundred thousand dollars in general many of them look at that as a cost in other words that cost me five hundred thousand dollars. If a private equity adventure kept with a palo or carlile comes in and pays somebody five hundred thousand dollars they look at that person as a potential ten twenty million dollar profit center. So it's nuanced it's not a cost it's a profit center but until the family offices get to the point where they start looking at it as a potential profit center and that is a cost like some of the family offices are they're not going to be able to get there. That's slowly starting to change. So what's fascinating about the industry right now is as private equity adventure capital as I said disrupted the public markets in the early 80s and 90s you're starting to see family offices compete and disrupt private equity adventure capital based on the fact that they've got patient capital and they've got money that can just compound and that's what they're looking to do. And this is how the family office environment is now evolving and this is what you're actively seeing now. So we're living through this renaissance of this is happening real time and again I will tell you that a lot of the family offices post crash pre-COVID the thing with family offices is they wanted to direct investments and they wanted to direct investments because they didn't want to pay 220 they didn't want to pay the fees. The problem the good thing in the bad news the problem is everything from post crash pre-COVID everything went up so if you're investigating private equity adventure capital real-state Bitcoin the stock market you probably made money. So these people who did these investments and then they didn't pay fees it's not that hard. As we head into recession and I think we are starting to head into recession people will realize there's a skill set to what these private equity adventure capital real estate guys do and I think a lot of people are in over their skis. So I think how this is going to play out a lot of these people who did the direct deals previously are going to come back to more the experts won't mind paying the fees because they realize that they're worth it and the family offices that have built out institutions like the Pritzkers, like the Dalles, like the Crown family they can compete directly but you're going to see a backlash and more of the family offices at least in my opinion are going to use consultants or use outside people rather than doing everything internally unless they've got the right infrastructure. So this is all happening real time right now. Well you know I'm curious about going through a liquidity event that large and I know that you chair I think one of the offices for Tiger 21 and I've spoken to Tim from Tiger 21 and I understand that that's not an advisory for like a private equity firm but it offers guidance as to what to do holistically. Very similar to what you're saying all the multi-family office services provide it it's a holistic view of what to do after a major liquidity event right and I think that I mean you you see this firsthand people going from operator to capital allocator at like on mass like with huge amounts of capital have no idea really what they're doing and also maybe just you know speak through some of the things that they have to think about outside of this capital allocation that are the realities for them. I mean like you've just mentioned these numbers these very devastating numbers about how quickly generational wealth is lost so why does that happen? In my opinion a lot of it has to do with ego it has to do with the ego of the founder of the person who had the liquidity event. You have a liquidity event you could do anything you want with your money and I make no judgments you do whatever you want but I think a lot of times people think that because you're good at one thing that means they're going to be good at everything and it's a different skill set to sell beanie babies than to take a billion and grow it to two so I think the problem with many people is because they've had such success with with so much money at such a young age and remember this is not generational back when the Rockefeller started it took 10 20 30 years to create generational wealth you can create an app today in a year and create huge amounts of generational wealth so it's happening so quickly and that's why this the speed is happening so quickly so family offices right now you could talk to 10 experts and what's the family office how much money do you need for family office why do you create a family office you're going to get totally different answers I gave a keynote at Stanford five years ago I had five billion dollar families and I asked each one of them what is a family office and why did you create it and there were five completely different answers and nobody was right and nobody was wrong it's just that's where we are in the industry so I think that the fascinating thing for me is that in 1986 when I was a senior in college my dad who was a brilliant banker wanted me to meet this guy who was also a banker and he said there's an industry called private equity and I'd like you to look at it because I think it's going to be big well when you're 20 years old you're smarter than your dad and so I said dad I already got a job at Drexelburn I'm not going to listen to who you want me to talk to and I went to Drexel well fast forward two years Drexel goes bankrupt and the person you want to introduce me to was John Canning who started a Madison Dearborn which became one of the largest private equity firms and the industry was called private equity so that to me when I look at that point and obviously in retrospect I would have done things differently but I do think that we're at that inflection point right now we're just like private equity venture capital firms disrupted the public markets I do see family offices starting to do it so I do think we're at a tipping point right now and I think family offices can make a huge amount of difference not just in creating alpha but equally if not more important in a lot of the philanthropic endeavors I can engage in and obviously to engage in philanthropic endeavors I have to be successful and maintain that success but I'm curious about this seems like there's this problem with the family office industry for lack of a better term it's that they're so fragmented you mentioned this before so how do you actively fix that because there's no there's no group or organization that supports you know the collective body of family offices so what drives them in the right direction well and the other issue is you know a lot of there's a lot of family office kind first of all every bank every law firm every accounting firm they're trying to get into the family office world where all the money is that's it makes sense and you've got all these family office conferences the problem with a lot of the conferences where these family offices are supposed to learn to invest is many of them have become a pay-to-play game so if you're speaking it's not that you're necessarily an expert in real estate it's that you spent $25,000 to be able to speak and you're really just selling your funds and here in conflict of interest in my opinion so I think that you you have to look at from the standpoint of what is in the best interest of family offices and where are you getting your deal flow from and what are people's agendas so everybody has an agenda and that's fine but I just think that family offices in general the first second third thing they want to know before they're going to work with anybody is can I trust this person and then the fourth thing is what's your one three five your track record what's your biggest drawdown that's flipped when you look at it from an institution so trust is the main component of why family offices will work with somebody I just want to take a second and thank the sponsor of today's episode HubSpot it's time to get out of your spreadsheets with HubSpot CRM you get real-time data at your fingertips so your team stay in sync across the customer journey you track your contacts and customers and personalize the emails and bulk and get the contacts you need to create amazing experiences for your teams and customers at scale all from one powerful platform it's why more than 150,000 companies already use HubSpot CRM to run their business better plus HubSpot user friendly interface sets you up for success from day one so you can spend less time managing software and more time on what matters your customers there's no better time to get organized learn how HubSpot can help your business grow better and get a special offer of 20% off on eligible plans at HubSpot.com slash success pod and so when you when you work with you you deal with this industry quite a bit what are the biggest misconceptions about family offices that you've seen there are so many misconceptions how much money you need to have a family office what's the point of a family office I mean a lot of these people and again I make no judgment if you make the money you could do whatever you want with it but many people would be better off just finding a philanthropy that they like in outsourcing a lot of what they're doing it's a full-time job if you're going to do it right it's a business and many of the family offices don't look at don't take it as seriously as they did their business if they did then they would realize it's a full-time job and if they did that I think it would become more efficient I think that's starting to happen but the beauty to me of where we are in the world from an economic standpoint is this is changing real time right now so the family offices they're not there today the smart people want to find the rich people and the rich people want to find the smart people but the smart people don't know how to find the rich people and the rich people hide behind a veil and want to be secret so how are they going to find the smart people this is starting to change and I think it's going to happen over the next three to five years it's not going to like click in all of a sudden it's going to happen but I think it's going to gradually change and people will start realizing the value of working with the family office a lot of people who are in real estate a lot of people who are in private you know who have deals independent sponsors they would prefer to work with the family office rather than a private equity or venture capital firm the problem is how do you find them so one of the things that I'm trying to help with in the industry and it's a massive task is how do you connect the rich people and the smart people because once they're connected and they know what everybody wants and everybody says this is kind of what I'm looking for it will be a much smoother market and it'll be much more efficient market I was okay so we've spoken through significant significant amount of info on family offices I'm curious if you want to take this in a couple different directions because there's other things that you that you do for these families I mean you literally invest in them some curious if you want to go into how you source and look at deals and what your thesis is for what is good and what is bad and what you put in front of families we can do that or I was you know we can also go into wealth transferring that's super interesting because you you hear all the time about why are the rich not paying enough tax and what's going on with that well I mean there's strategies as well to help you avoid tax that maybe the average person doesn't know that much about so whatever you feel like you want to go into which is the most relevant but they're both really interesting topics so no they are and also philanthropy which is which is huge that's been a big problem I don't even know a question to ask about philanthropy outside of I'm assuming it's a focus I mean I'm not at that level of wealth yet we're after worry about philanthropy so well look the so kind of my north star is so my dad passed away from prostate cancer 57 my first boss was Michael Milken Michael Milken developed prostate cancer what Michael Milken did is rather than throw a hundred million dollars at the American Cancer Society he built it like a venture capital fund right so he put 250,000 into this crazy idea 500 here 2 million here but because of him you and I and all the male listeners will die with but not of prostate cancer you look at what Bill Gates did for vaccines I would argue he did more than the US government my point being that if you you can't run a a philanthropy or family or a charity exactly like a business but you could run it more business like so kind of my north star if you take these really innovative entrepreneurs who've done extremely well and you apply that more towards philanthropy and I think that's going to solve some of the big world problems so I just did a podcast with David Rubenstein the other day he owns the magnet card he owns I mean he he helped rebuild the Jeff's Memorial he's done or the Lincoln Memorial he's done so much for philanthropy right now and so I think there's a lot of good that can happen out of that no I was going to say so it's interesting so you think that some of the future of philanthropy and it's not this is not to generalize it this has to be all a philanthropy but it's again it's more doing direct investment into causes that you can actually see I think something or yeah I think that if you look at Milken or you look at Gates or you look at what Bloomberg's done you you can take these business minds and you again and apply it more towards to solve some of these real world problems I don't think it's going to come from the government and I don't think it's going to come from the corporate sector I think it's going to come from these entrepreneurs who can make a difference so I think for me philanthropy is the most important aspect of family office because at the end of the day you can only you know the Pharaohs tried to barely bury themselves with money and that didn't really turn out to be a great idea what else you can't take it with you so giving it away and doing it in a way that are important to you is something that's really really relevant so we do a lot of work with family offices figuring out ways to and prostate canches near and near to my heart because my father passed away from it no I think that the smart a smart way to look at philanthropy because I think like the way that I default to looking at it is the way that I think most people do is just how do we put money into an organization or a government or something it's already set up and that's not the only way to truly do philanthropy and also what's the first if somebody has a philanthropy the first question people ask is what's the overhead it's not a good question you don't go to Apple or Microsoft and say what's your overhead it's irrelevant what your overhead is it's what's you know you can have a lemonade stand that the overhead is 1% but you're going to only create five dollars so I just think you have to start asking the right questions and looking at it from a big picture standpoint can we teach over some of the wealth transfer strategies that some of these individuals use I think that'd be very valuable so if somebody doesn't you know doesn't have the advisory of a billion dollar family office but I'm sure some of the strategies can still be leveraged so when you have money and you're trying to pass it on to your children your kids what are the strategies that you can look into and use well when I ran ahead my hedge fund I remember I think I was like 31 years old and I was you know it was a billionaires office and he had a state planning attorney in the meeting and he had no idea what he was the estate planning attorney had no idea what I was talking about from the from the business from the from the financial standpoint and when the meeting ended I asked the my perspective client who ultimately became a client and I'm like why was he why was he there I did it respectfully and he kind of put his hand on my arm and he's like you'll you'll understand one day he goes the goal is not to become a billionaire the goals be worth zero but control as much as you can and all these trust in a state planning attorneys they're just getting stuff outside of people's estates and that was sort of like an aha moment for me when I realized it so what these trust in a state planning attorneys do and a lot of the wealthy people the the family offices are closer with their trust in a state planning attorneys than they are the financial advisors because the goal again is not to be a billionaires to be worth as little as possible but control as much as you can that's trans wealth transfer it's a very tricky issue because you don't want to give the kids too much money right so that's a problem unto itself um but you want to bulletproof yourself for litigation you want to make sure that you have the ability to get things out of your estate but you still can control it and that's all these trust that's all these trusts of state planning is due and that's really it so if you if you start a trust and you start to transfer your assets into that then you can become like a managing director of that trust and that does mitigate some tax responsibility correct yeah a lot oh if you look at anybody any family officer anybody who's worth you know a lot of money they've got a state planning attorney in place and they've got trust set up and they've got stuff outside of their name um they might be in their children's name it might be but they they structure where their bulletproof from a litigation standpoint and they maximize the benefits they could they could use within the law of what what you can do to transfer yours yeah no I think that that's the one thing that's very frustrating is that um the average person like they they pay such a significant amount of tax and everything they do and it's it's usually because they don't have access to strategies that can mitigate tax and that's really it like very legal strategies look the tax codes absurdly unfair I mean it is what it is um if you look at the people who've made the most private equity hedge funds I mean you're paying you know you're carried interest I mean a lot of that is tax is you're you're you're benefiting from the tax system real state um you know 1031 exchanges you're benefiting from that so a lot of the people who've made their money has to do whether it's real estate private equity hedge funds it is utilizing this the tax code and being able to benefit from that yeah no it's it's just smart to think that outside the box and just speak to people because these strategies are not mutually exclusive to wealthy individuals that's the thing like they can be used by anyone um uh and then I guess the other question is there any other any other I guess uh before we pivot into like deals that you look at is there any other like strategies or or tips that you pick up from dealing with these ultra high net worth wealthy individuals that would be just good that could be utilized by somebody who's obviously not in a lower income bracket yeah I mean I pick up things every day um from from them and I think um the most important thing I think I do is I try to I'm good at it I'm not great I'm getting better listening is a skill set that people in general aren't really good at just listen to people and the people who've done quite well rather than talk so much just listen to how they did it what they did what their strategy was um I think listening to people who've been successful for for anybody um what techniques they've used what strategies you've used what's their what their M.O. is I think the ability to listen is a skill set that most people are not really good at and they're looking to think about the response to an answer before they actually fully listen to the full question do you notice that that's something that is particularly uh like a a particular skill set that people that are ultra successful they have that in space like the ability to actively listen to to sort of take a second seat in the conversation to make sure they get 100% of that information well A you're very good at that um B um my dad told me that he was a banker and he said you could always tell the lawyers and the entrepreneurs because you go to a meeting with 10-12 people and the lawyers would come in and in general they would try to show the people that they're the smartest guys in the room however that is the entrepreneur their agenda they want to find the smartest guy in the room all I try to do all I've done is just surrounded myself with people that are smarter than me in various areas that I trust implicitly and delegate and if you do that I think it's very hard not to succeed agree that's very smart um okay and then last thing that I want to go into just very briefly um you get access to some of these incredible deals but then you put these deals in front of your network who trust you implicitly to basically make sure that these are good deals so when you look at some of these deals what are you looking for because that's a lot of responsibility too right but again they also vet the deals too right of so they've got another level of diligence and a lot of the deals we get might come from the family offices that we work with where they see a deal it's just too small for them right so a $20 million deal might be too small for them they love the deal they've vetted it it's a terrific deal risk reward but it doesn't make sense it's like an individual investing $50 doesn't make sense to do the diligence um so a lot of the deals we get are from the large family offices who see really attractive deals it's just too small for them it's not too small for me but still I mean so that aside there must be some things that you do look for in deals like some strategies so we we do a lot of it is related I would say um most of the families that I work with it this it's all a relationship business and with with the right relationships um I think that you'll see um people will know who you are and and what what kind of deals you're looking for I think that makes a big difference and I think that people also want to work with people that they like and they want to work with people that they trust and you know I there's there's a person you know I'm a big believer in just given um at the end of the day I can't tell you how or why but the more you give the more you get it just it just happens I can't tell you why rationally but I know it's true there was a guy in New York um and I'm always introducing people to be other people and I would say 10 to 15 times a day I will certainly email I'd like to provide a mutually beneficial introduction I don't have agenda there's I don't have there's no benefit to me I just think that this person should know this person because they could each benefit themselves that's how you have to look at it well when I was in New York I was in a family office conference and there was a guy who was trying to raise money for um early sage venture fund and we're talking in a cocktail party like oh you should talk to this person to one thing led to another and after he talked to the the guy from the venture capital he said why did you introduce me to that person like well what do you mean he's like he he doesn't invest and like I'm not my goal at this party is not just to find people for you to invest it right I just thought he was a nice person and you're a good person it'll be good to meet now fast forward I've never given that person a recommendation so I think the the the problem the the issue is we live in a society right now where we want to get and we want to get instantly and I think as you get a little and I was much more myopic when I was younger I think what you realize is the more you give the more you do get and I think that's a really important lesson that I've learned a lot from a lot of the family office that I listen to just because I listen to them um I'm curious when you when you deal with people that are just starting out uh do you see that one of the biggest detriment is their lack of patience because that's what it seems like that one particular individual just like the lack of and actually patience has been a theme through this whole conversation to be honest it's like what disrupts inpatient capital it's patient capital what what did you do well during your career well you were patient with the relationships you built and and you gave and you gave and you gave and you expected nothing in return and then eventually well again I was much I was much more myopic when I was younger so I didn't look at the world through the same lens that as you get older hopefully you evolve and mature and look at the world through a little bit of a different lens um but I just think that you have to be able to look at things from a perspective of you know what's going to benefit somebody else and then if you do that again ultimately it's not a it's the antithesis of a quid pro quo it's basically figuring out if I knew somebody who would be great on your podcast I would go out my way to introduce you because I think you do a great podcast and I think they'd be a good guest period I don't there's I don't even need to be involved in any capacity but it's a mutually beneficial introduction and I think that more and more people need to do that I think this generation right now um well the there's a lot of problems first of all the phone is going to be the smoking of this generation number one two um I think the the work ethic in general is not near where it is from my generation um and three they want to do things quick and anything good it just takes a while it takes time it takes patience and when you're 22 years old it's easy to say it's hard to do and you know so if I had to do I when I was talking to David Rubenstein last and a podcast I did with him two weeks ago and like if you had to do over what would you do differently and he became he wanted to law he became a lawyer first he's like I wouldn't have done that I would I did this I wouldn't have done that um we all have do overs we we would all do things differently I think but I think one of the major things that that I get out when I listen to people is I hate going to conferences and listening to people talk about how great their track record is or how subtly telling you how wonderful they are I've made a ton of mistakes in my life and a lot of entrepreneurs and people have made a lot of mistakes I'd rather talk about the mistakes that I made than the fact that I might have done well in a specific strategy or you know grow my business to a certain level the biggest compliment I ever received in a conference and I speak at a lot of these conferences all over the world is that was really authentic and I didn't take that as a compliment I just you know took the things but saying that you were authentic um I think that's really important and I think that a lot of these people look up to people like a David Rubenstein like authenticity is really really important and again everybody started somewhere and everybody could help somebody in some way and you have to pay it forward and I just think if that's a mindset you have people see through it and authenticity is really important also because you you you have to be genuine in what you're doing and people see through that too so I just think that um again the family offices that I've worked with in general a lot of these people so on the common thread they have they're very authentic people good or bad and just they're they're you know we're real believe and um they also have a lot of gratitude which is a huge component of my life um those are those are good questions and I you know I I hesitate to ask them because not everybody's comfortable going into those but you know since since you did bring them up I guess I would even ask you like what would you do what would you have done differently in your life what was the one thing that you regret if any a lot I would have done a lot differently I I would have um there's a thing um my daughter was eight years old at the time and we have a thing in our house where if you call three times in emergency so I was meeting with the large family office I got three calls and like I got to take this she I said I thought she was in the hospital I didn't know what happened I said what happened she said daddy what are the five most important things in life like what's wrong she's like no no I need to know this for a project so I'm like okay well this is an emergency and we'll talk about that when I get home so fast forward six hours I went home and then and I said first of all only call three times if it's an emergency second of all tell me what you're doing and I I'll help you with it and she for her project they had to do the five most important things for that so for her I worked with her on it it was being popular she's eight years old she wanted to be a really good athlete she wanted to be a really good listener and there were a couple other things and then she says as children do what are your five I'm like they're whatever don't worry um but then it did resonate with me and I and I thought about it and then over the next couple months I did think about it more and for me in order it's love gratitude attitude balance and laughter those five which isn't right or wrong that's just kind of how I one of the most important things to me and I got I only did that exercise because my daughter asked me to do it but those are the most important things to me so I think that um I would have done I would have I try to look at every every person you meet try to look at how does that meeting going to be impacted 10 years from now not 10 weeks from now or 10 days from now um I think you've got to take a look I think you need to be um true to yourself I think you have to slow down um from the the fast pace I think surrounding yourself around really good people is I've done a good job of that but it's more important to me now I will not I try not to hang around people who are negative I try to hang around people who are positive um who are caring and thoughtful so the types of people I hang around um I wasn't as focused on that when I was younger um you know there's a lap that I that I would do differently but again like Dave Rubin seems to you know I entered up in a fine place but I wouldn't do anything differently per se because I want to learn those lessons right so if I if I it was like Benjamin Button like if I if I have to over um if I said okay I'm not going to do A B and C I it wouldn't be as relevant to me today to realize the mistakes that I'd make so sometimes mistakes in in in errors that you make are your biggest lessons that you could learn very smart and I would ask also um one last little bit of wisdom from you for people that have had a liquidity event and are sitting at home and listening and they're they're trying to figure out what's the next action they should take so for somebody that does come into significant amount of money um where do they go what do they do what are the first things they should have top of mind so that they don't screw it up basically two things one the very first thing to do for everybody is talk to an estate planning attorney what most people do is they see a great private equity deal a cannabis deal a real estate deal don't invest talk to a private talk to a estate planning attorney and two don't do anything for six months or a year and yeah you might miss out on a huge opportunity and I've never bought a stack at the bottom I've never sold a stack at the top and you're gonna miss out for six months to 12 months just don't don't make major investments let things settle and then over time then start doing it so talk to a estate planning attorney and do nothing for a year that's my advice very good advice okay um before we wrap up any other things that we want to go into that you want it to bring up um that we didn't go into any questions that I should have asked you that I didn't remember to ask or no to ask you no I think you I think you were you were very thorough you're you know you're very good at what you do um I just think that you know when people want to talk to me a lot of times it's because I'm the family office expert but it's just and people will often ask like how do you get to work with family office it doesn't happen overnight and it's not like I get calls all the time like can you introduce me to this family and it's just because they want to raise money for a fund you have to take a much longer term perspective and I think that for people who are looking to get into the family office space more um figure out a way you could benefit the family office so when when I'm working even if it's a multi-billion dollar family um the first thing I'll do is I'll introduce them because even though they're connected they don't know everybody they don't know even know most people I'll introduce them to other family offices so they can kind of share best back I'm not even involved in the conversation but by introducing them to other families um that's a value ad figure out ways that you can add value to anybody and everybody in whose life you're in and I think in general good things happen very good okay um last question that I ask everyone um well first of all I'll I'll ask you where should people go to connect with you social media website all of that um I don't I don't I don't the only social media I use is LinkedIn so link I'm fairly accessible on LinkedIn I don't use Facebook or anything like that um I do have a I'm want I just launched a family office podcast a family office world podcast.com um I just did one with David Rubinstein recently and and I actually love doing that because I get to again surround myself with people that are smarter and more successful than me so I enjoy doing that great okay perfect um I'll link those so we'll get those links and in the show notes and then last question I ask everybody um after your career after all you've accomplished what does success mean to you it's a great question um I think being true to yourself being authentic um I ask David Rubinstein the same question and I'm like is it more important to be happier significant um I I think that to me it's it's being true to yourself it's being authentic it is um giving back in whatever way you can and you know at the end of the day you know if enlightenment is ultimately what people want to do I'm not there yet uh but you know you want to there's a lot more to life than just making money and creating alpha I know a lot of miserable billionaires um if there were direct correlation between wealth and success or happiness I would just tell people to make as much money as you can it's not the case and it's the people who are thoughtful and think about how they want to live their life so to me it's it's a balanced life it's a life filled with love and it's a life surround by family and close friends that you can trust um implicitly