$1 Billion Allocators: Insights Directly from Family Offices and Investment Firms

In this exclusive episode of The Family Office Club Podcast, top billion-dollar allocators share invaluable insights into their investment strategies and real-world experiences. Hosted by John Latter, founder of Fabridge Asset Management, the discussion features a panel of seasoned family office executives and investment firm leaders. These experts discuss a wide range of high-impact investment opportunities, including real estate, private equity, alternative assets, and emerging markets. Learn about their strategies for navigating current economic challenges, capitalizing on distressed assets, and making innovative investments in sectors like affordable housing, AI, critical minerals, and vertical farming. Additionally, panelists share valuable lessons learned from years of experience, focusing on due diligence, risk management, and long-term wealth creation. Whether you're an investor or a family office looking to expand your portfolio, this episode provides critical knowledge on high-net-worth investment strategies and success in today's evolving market.

Transcript

>> Thank you. So my name is John Latter. I'm founder of Fabridge asset management,
spoke to many of you, had the pleasure of speaking with many of you today. We have
a great panel today. Everyone up here on the panel is a billion dollar allocator.
I'll give you a quick update on Fabridge. So Fabridge is a real estate investment
trust. We're a national read and we specialize in credit opportunities. And And for
this panel, this is going to be a speed panel. So what I would ask each of the
panel to do is if you could state your name or your company name, what type of
investor you are, whether that be a private investor, angel investor, single family
office, also what you typically invest in, whether it be real estate tech, any
preferred investment structures, the number one types of investments you are looking
for right now and then lastly if you could please share your most valuable one
million dollar plus insight or lesson learned in business or in investing and the
way we're going to run this is each of you just take five minutes you need me to
go through these questions again I'm happy to but if you could just kind of go
through it in five minutes that would be great starting right here thank you I run
a single family office here in Los Angeles. Our primary asset is multifamily and
shopping malls. We have about 10 ,000 units here on the West Coast. And I've been
allocating to alternatives such as private equity, private credit,
and sports funds. Most recently, we have been doing a lot of sports, but due to
the economy changing and obviously we don't know where Trump is going with his
policies but we're trying to focus on more liquid investments versus close -end funds
or funds that I have terms of seven to ten years so we preferring to do things
that are you know more in the one to three years at this point.
What else do I have to do? It's like a long it's like a whole Summary any
preferred investment structures. You like whether it's the LLCs spvs. However you
invest Entities don't matter to us And we really focus on the investment We really
you know a lesson learned is really spending the time to do your diligence on front
because once you're in the investment It's really too late. So we have a team and
we go through multiple levels of analyzing each fund, comparing it to other funds,
go to conferences such as these or maybe something that's more focused. So for
instance, if you're looking at a private credit fund which has been very popular
over the last two years, you know, you might want to meet 10 or so funds and
then, you know, compare each one to another and, you know, look at or focus as to
where, Which you know if you want geography based in the United States versus
international You know, what are their returns their history? What is the AUM of the
fund that is the assets under management? So it might be an emerging emerging
manager that only has let's say ten million dollars versus Another manager that might
have a billion or more and that same time is what is their longevity? What is
their history? What can you learn from them is really focusing as to, you know,
which fund makes most sense for your strategy that you're looking for and your risk
tolerance. - And my last question would be, and I know a lot of people in the
audience have been asking me this question, when you invest, never mind the
investment vehicle, do you co -participate, participate, you go directly in the GP,
LP, how do you mostly structure your investments? - So on the real estate side, we
only do GP. We are, I mean, at this point looking to possibly take on outside
investors, until now it's really been just family and friends.
But we've grown pretty drastically, but at the same time there's just so much cash
you can put out on deals for further growth unless you're trading properties and
doing 1031s. And obviously in this market with the high interest rates and you know
there's just no deals going on right now on the real estate side so on the
alternative side you know we're still looking for for new deals. Thank you.
Dan? Second, third generation Italian American. I built a private equity alternative
investment business with destruction over three billion of equity.
I was an elite basketball player in college, which I think was very helpful. We
looked at the world very differently. We think we're in very treacherous times, also
times of great opportunity.
We've done very large deals. We did the biggest deal in Tennessee history called
National Yards, which ultimately be a $3 billion multi -use real estate deal,
probably the biggest in the Southeast. We've done as much as 12 ,000 lots in a real
estate deal done in Austin, and we're currently the largest player in manufactured
housing. Developer and landowner, we think, you know, the largest crisis,
probably in America's affordable housing. And the technology of manufactured homes have
been upgraded, but the communities are pretty trashy. So we've created a high -quality
communities, and we're going to build that business from two billion of assets to 50
or something, it's a dire, dire need outside of healthcare. We believe in the
American dream, we believe, you know, the countries are a great country still. We're
heavily involved in distressed assets, it'll be a trillion of reset multifamily loans
that are underwater, we'll, you know, do the entire capital stack in creative ways.
We've done, you know, 12 ,000 multifamily units, 15 ,000 subprime auto loans,
all types of things. So we're willing to learn businesses and partner with very
smart people who know those businesses for decades. And we want to, you know,
get very high returns. But like this business room with manufacturer housing, if you
look, these communities are better than starter or single family homes, and we're
saving the consumer percent and the consumers broke right I mean 70 % of the country
is borrowing money to get grocery bills so something's something's wrong in the
country I think everybody knows that a substantial way so how do you capitalize and
how do you help revitalize you know various very inadequate industries everything's
broken right everything the government touched they broke And most of these industries
like home building is still doing the same stuff it's been doing for a hundred
years and costs keep rising. So we're looking and willing to meet with people who
have portfolios, recapitalizations, whatever. My dad was behind a company,
Telzon. He and his partner took 90 % of the handheld barcode reading market. It was
a fascinating Great American success story again and so we're grateful for the free
markets we're grateful we didn't get you know thrown into a kind of a socialistic
you know very rough taxing
capital gains stuff like that so we appreciate everybody's time appreciate Richard for
what he brings here and again we're open for business thanks
- JJ? - So I'm JD here out of California. I come from a different background.
I used to be a bariatric plastic surgeon. I wasn't too good at it, so I had to
find a new job. So the next thing that came to me was commercial real estate in
our family office. We currently have about a billion dollars of assets under
management, and we have capital to deploy. One thing about this, we're diverse.
In commercial real estate, we started from the hotel business, of course, being
Indian. And then going from there, we went to multi -family, self -storage, industrial,
and senior care homes. So we're looking into data centers.
We're heavily in AI. We also do alternative investments, our oil and gas,
commodity, precious metals, as well as bank instruments, SBLCs,
stuff like that. So we're kind of, we're different, we're not sure, typical,
we look at a deal from every different angle. Because if you're talking about multi
-family, how many times can you change carpet, you know, paint something, everything
has an age, and how much do you push rents? So we come from a different angle. We
had a property in Hilton Head in 64 units, you know, we bought it for $4 million
and after two years stabilizing it, our broker came and said, "Hey, you can sell
for another two more million, "$6 million," I said, "You know what? "I'm gonna do
this a little bit different." I said, "I'll sell it for," I made a bet with our
broker. I said, "You know what? "I'll bet you I can sell it for more than $6
million "if you buy me Super Bowl tickets." Well, I said, "Let me look at this
perspective, instead of selling as multi -family, what I did was we went to the
county and got 64 parcel units. We ended up selling as a timeshare.
Cereforms were six million. We sold it for 14 million, looking things creatively. So
what we like to do is look things different. For example, we had a property in
Cincinnati and we changed a lot lines and sold them as fourplexes, holy shit,
people were putting 3 % down and overbidding. So we kind of look at things a little
bit different. We're not your typical numbers. We also underwrite people too.
You might have a great deal, but you gotta look at the people behind it. So
sometimes the numbers might not work and the people behind are great.
So What we tend to do, we look at return on effort. We don't just look at ROI.
If I have to put a lot of time into a project and the payout's not there, it's
not a deal for us. Why, instead of 2X, why do you look a little bit more, look
things different? So that's how we look at things, prospectively.
So it's more of a relationship, not a transaction. If someone wants to do a
transaction, I'm not your guy, to be quiet, and we're all about transparency. How
can we do it together? That's our mindset. And so that's how we, when we do
development, we do a lot of develop, we make it a community, okay? So part of one
thing we do too, we're kind of innovated. Part of our management, we knock on
everyone's door every two weeks, how's Billy, how's Bobby? Make it a home. If You
make it a home for someone, that's 90 % of that. And by doing that, we have no
turnover, and we can increase our rents between 1 % to 3 % every year without no
doubt, because we made it a home. But the way we're seeing things is there's a lot
of opportunities to come, and that's where we're seeing. A lot of our deals we're
getting are not through brokers, it's through the banks. And in making those
relationships with banks. We have great, we have also great debt and equity
components that, you know, engineering the components of the capital stack. So that's
how we look. We're in other businesses, seniors. Senior is, senior care is one of
the biggest opportunities. The seniors are retiring. There's never been this big of a
generational wealth where so many seniors are returning one a minute and our seniors
are living till 80 and there's so much, there's 800 ,000 beds short in memory care.
And then if you look at the component affordability, it's cheaper to rent than to
buy. We're 4 .8 home short in the United States and we can't build them enough.
So, you know, there's so many opportunities that there's a lot of programs out there
where it boggles me that there's grants, a special HUD financing, where the DSCR is
so low. And so we see a lot of opportunities. And to the question,
you know, lessons we learn, the most expensive real estate in the world is the
graveyard. Why I say that? There's ideas, woulda, coulda, shoulda. You know,
that billion dollar idea. What I tell people, pursue everything. Don't, you know,
people say, hey, fall back, fail forward. Learn, I've learned, we lost a lot of
money. But by learning those mistakes, we want, I want to fail now. And that's
where in the environment today, people are scared of failing. Why don't you fail
now? I tell my kids, fail now. You know, that's what happened. I, in happen, in
plastic surgery, I feel a lot of times, I'm just kidding, I know, I couldn't make
those mistakes.
But yeah, just don't Google my name. (audience laughing)
But like I said,
we are in the best country. We're 99 % better than the rest of the world.
If someone says they can't do it, you have a problem. So, you know, the average,
to be top 1 % globally, all you have to make is $32 ,100. So you're already top 1
% of the world. And if you look in the United States, if you make more than 400
,000, you're top 1%. So if someone says they can't do it, man, you have a big
problem. Because all real estate, what is all mindset, 99%. If you think you can or
think you cannot, you're already right. So, guys, fail now, making money is not that
hard, is the consistent mindset. And that's how you go from zero to 100.
Fault, you know, fall, fail. It's a learning journey, you know? So, sorry, I went
off and ended there. - That's okay, it's fun to go. (audience applauding)
- You're a hard act to follow. - You've got a hard one to follow. - Shut up.
- I work at Raymond James. I work here in Beverly Hills. My team of five advisors
and 21 support staff manages six billion. Many of you know my partner Lisa DeTana
who is twice the president of the Chamber of Commerce here in Beverly Hills. I do
four things at Raymond James, fully functional family office and high net worth. I
do investment banking about 30 % of my practice. I do foundations and endowments,
and I'm one of the few people on the street that's doing liquidity raises for
family offices, venture capital funds, private equity. The present discount is about
50%, and on the reverse, if you're a family officer and investor,
why wouldn't you call me and put in an order wanting to buy some of the special
purpose vehicles that we raise to add to your family. In the family office space
area, I work very hard in analyzing private equity and venture capital ladders in
addition to rebalancing whole estates across the whole of the platform, not just what
we have in multiples of managers including offices, real estate,
private holdings both cross -border. In the investment bank space I work with
businesses 5 million EBITDA valuation 30 million and up to raise growth capital or
do M &A exit or ESOP. In the foundation and endowment area I've been working very
hard for more than 20 is to reorient the thinking to be allocating to stocks,
alternative asset classes, and fixed income in that order. I follow very closely the
Nekubo National Association of College and University Business Officer's recommendation,
which is 53 % in stocks, 26 % in alts, and 21 % in fixed income.
If you listen to, For instance, the chief executive officer of Apollo who I recently
met with last week, they recommend 30 % in stocks, 20 % in bonds,
30 % in private equity proxy for equities, and 20 % private equity proxy for fixed
income. I'd be happy to answer questions later if we can help. Thank you. I'm going
to be a little bit coy because my boss has not allowed me to use his to use his
name. It's a fifth -generation family office. Actually, the baby was just born, so
it's now a sixth -generation family office out of Europe. Extremely large family
office with holdings across multiple countries in Europe. My boss is the troublemaker,
youngest brother sent to America to get him away from the family, so he does
venture, he does private equity. He says that about himself, so I'm not being
facetious here. I actually was in the audience 10 years ago trying to raise money,
and over the time I've gone from advising family offices to finally getting hired by
a family office. My role used to be technical diligence, used to be a college
professor, so I would be called in by families to bring in expert guidance on
particular deals or transactions. In this particular role, I basically supervise our
direct investment portfolio. My boss does not like paying fees, does not like funds.
He basically only goes direct or go and invest in other family offices. We have two
essential investment theses. I'm going to be very transparent in case some of you
who might have a deal would be helpful to us. The Scandinavian family, so this is
a non -political comment, but we invest against the ability of America to solve its
problems. An example of that is food security and food supply is in crisis.
There's a very significant likelihood of the San Joaquin Valley will collapse its
ability to produce food. So 10, 15 years ago, the family started investigating and
both investigating and researching and investing in urban and vertical farming
capacity. And we're looking at technologies adjacent to food production and a
transition from dirt to industrialized food production. So any technology adjacent to
that we're looking at and investing in. We're actually building facilities. We also
build data centers and the heat from the data centers funds and provides the heat
for our farming production. We also do logistics and shipping and warehousing and
transportation around food capacity. The second thesis we have is around critical
minerals and rare earth minerals. And so we own mining operations in multiple
countries. And we are in the process of trying to basically go to war with China
Economically, as a family, we believe they have a stranglehold over rare earths. Most
of you don't know that every critical mineral in the world, it's mined anywhere in
the world, is sent to China for production, the next -stage processing. So our thesis
is that we have to allow the Western world to have that capacity, so we're working
with several large family offices to, I can't say much more about the transactions,
it's still in process, will be a very, very substantial US -based processing facility.
So our family likes to build industrial capacity and invest on 30 to 50 year time
horizons.
What else we're looking for? We are very sick of LLMs. We don't wanna look at AI
as a consumer product. We're looking for embedded AI or autonomous AI,
AI in hardware, AI in production, AI in systems. And we're looking at several
transactions or funds that invest along that thesis and then on a personal level my
boss again says this personally he spent 14 years trying to have his first child
went through seven or eight rounds of IVF anything that has to do with fertility
treatment innovations in female health care that's one of his passions and he would
love to talk to people that have any investment in that area.
Great so we have about Two minutes left. I just want to hone back in on the
question I know a lot of the attendees are probably looking for the answer of that
One million dollar plus insight or lesson that you could give so if there's that
one large insight One main insight if you give the attendees here today What would
that be anyone could start never quit do you go last never quit never surrender?
Don't listen to anybody - No, seriously, be delusional, but have some skills,
some skills, and partner with somebody if you can't be humble at the same time, but
I mean, to be successful in America today with the amount of pounding you're gonna
take,
it's persistence is better than a Harvard MBA, especially if you have integrity with
that, is better than anything you could bring to the table, or strong up every day
in competing at the highest possible level you have the skills to compete and over
time if you compete every day you'll eventually be very dangerous and have a lot of
skills also create a world -class network you don't need a million people it could
be three and they could control five people one of my dear friends here is one of
them and you have that and you can aggregate things and you can you know effectuate
change change and do large transactions.
- I would like to add that many of you have worked really hard to make your money
and what I've seen with different family members or other people that I've worked
with is that you make all that money and then you have a friend or a family that
gives you these investment ideas. Just stick to really putting your money with a
bank and in areas where you know your money is safe, maybe take a small allocation
and if you're interested in getting into like a restaurant or something that has
high risk but the bulk of your money really should be placed in in safe places
where you know you're gonna wake up tomorrow and it's still gonna be there.
We're just about out of time. Does anyone have any last minute? Can I just...
30 seconds, I'm from Utah, so this has context. Always say yes to a beer.
(audience laughing) Three of the families I've worked for have all started with
interesting conversations at events where I didn't know who they were. So be social,
talk to people, learn about them, learn about them as humans. If the transaction is
how you lead, you're not gonna be successful. Start with human contact.
- On our private institutional client desk for a It's 50 million net worth and up.
We have between 10 and 13 offerings a year. My team did the first liquidity event
for SpaceX. We did the second liquidity event for SpaceX employees. In April,
we'll do the third liquidity event, the last one, and it'll be the first GROC XAI.
You might be interested. You can give me a call. And we'll have those available,
but in general, we're happy to help anything we can do, I love to talk shop as
you can tell. - Great. - Just real quickly, invest in yourself. That's the biggest
thing, knowledge is power. And you know, I love to talk to everyone. Look, I'm an
idiot in training, I have a growth mindset, I wanna learn, there's probably smarter
people than me. But let's how do you do it together? But there's one thing, let me
just, one short story about Elon Musk. Elon Musk, Tesla was gonna go bankrupt in
2016, they couldn't build those cars fast enough. But he had outside -minded thinking.
He said, hey, how do I produce these cars fast enough? His thinking was, hey,
let me hire lazy people. Why? Why would I hire lazy people? Instead of going, you
know, building a car from A, B to C, he said a lazy person will find the
shortcuts, go A to C. So that's what made Tesla. And there's no one better than me
or better. I would love to talk to anyone. You know, there's opportunities. There's
some things I don't know and there's some things you know. Let's collaborate and do
it together.
Thank you. Thank you.