Q/A: SFO Direct Investing 101
A Q&A with Nathan Troutman, Privatus Partners, LLC on SFO Direct Investing
Q: Multibillion dollar families too often have great complexity in their investments, how did you go in there and review their holdings and whether these where successful or not?
Q: I have heard you discuss some of the assignments you had, i think our audience would be interested in an example of how you went in there and “cleaned” things up?
Q: Another example with another family?
Q: Given your investment banking background, what are common mistakes that families make in investing in direct deals?
Q: Many believe that alpha opportunities are going to come from direct investing, how do families source deals and incorporate this philosophy into their allocation?
Q: Deal flow and then making the right decisions are critical, this is much more hands on then most other investments, do they outsource this or should an SFO build this internally?
Q: You have such a wonderful background, please tell us a about how you got into investment banking and why you found this so engaging?
Q: After a successful career you then initially consulted and worked in such a capacity for some of the world’s most prominent families, how where you able to do this?
AJR: You have such a wonderful background, please tell us a about how you got into investment banking and why you found this so engaging?
NT: I came from a business family background. within my immediate family tree, someone has been involved in farming (tobacco, corn, soy beans), construction, beverages (Nehi Sodas, bourbon), construction, food processing or barges. I owned my first business when I was 17 which was a concession business at a large municipal park with two baseball elds and a pool. At peak periods I had ten employees. So Business School, wall Street, investment banking were places I thought I could learn how to do business better.
I was especially intrigued when I discovered that I didn’t necessarily have to
build the business myself as my family members had done but that I could buy an existing one and that there were ready sources of capital to do so. in that regard, I immediately gravitated to M&A, Merchant Banking and bankruptcy work to learn how to value and buy a company. I never had much interest in the capital markets side of investment banking. Investment banking provided a terrific exposure to business. I didn’t necessarily like the business itself of investment banking as I saw its underbelly continued to grow over the years with conflicted advice and fee gouging.