Billionaire Family Values - How Do Your Values Stack Up?
When you meet with with $1 billion families, you may have noticed that the they prioritize based on different values compared to any other investor client, even other high net worth families and individuals. Here is what I have found these billionaire families value most:
1) Capital Preservation – A mix of risk management and opportunism: Capital preservation through investing in outsized returns for moderate risk. This does not mean a high risk-high return strategy; it simply means they try to earn, for example, a 7% return in a way that manages risk much closer than others seeking that same return target for one area of their portfolio.
2) Deal Flow: High quality deal flow, profitable $1M-$50M EBITDA companies that they can write a $5M-$250M check to acquire. We have entire chapters dedicated to this topic found in other places in our book "The Single Family Office: Creating, Operating & Managing Investments of a Single Family Office".
3) Talent & Network: Experienced talent, insight, genuine value-add
recommendations and referrals. This community works upon referrals and trusted networks. They cannot investigate completely every opportunity on its own—not thoroughly at least. As Richard Branson has said, “At my level, I cannot do anything myself, I must rely upon my team and operating business CEOs.” In the same way, billionaire family offices rely on their staff, business partners, friends, and other relationships to provide referrals to valuable people and opportunities.
4) Legacy Establishment: Whether it is through dominating their industry, charitable contributions, continuing the growth and sustainability of their wealth, or all of the above, families of this size put an enormous amount of thought and energy into the legacy that they will leave behind.
Different families will place these values in a different order, but I find these topics and value points coming up weekly in my conversations with them. Those who can add meaningful value in a powerful way while speaking their language get invited into their inner circle.