Case Study 2 : Modern Single Family Office

Case Study 2 : Modern Single Family Office

by Angelo J. Robles, Founder & CEO and Joseph Reilly

INTRODUCTION

The Modern Single Family Office No. 2 is the second in a series of profiles of innovative family offices. We are attempting to capture the attitudes, behavior and characteristics of the newer types of entrepreneurial and active family offices that we see sprouting up, as well as the more established offices that have held the rudder steady for successive generations. The membership of FOA seeks to learn from each other, and is often frustrated by the opacity of the family office world and the paucity of detailed data to be found in family office surveys. The very nature of modern single family offices, the need for privacy and confidentiality, creates a veil over the sharing of best practices, processes and return profiles. We seek to fill this gap with critical insights into individual family offices, provided by our members and for our members, with as little editorial embellishment as possible.

Profile: The family office profiled here was created in 2005 by a successful insurance entrepreneur who joined forces with another family. It is a good example of a true multi -family office, which are exceedingly rare.

Joining Forces in the Modern Single Family Office

In 2005, this office was formed after the sale of an insurance company. That same year, the founder met a dynamic individual sophisticated in finance and entrepreneurial pursuits. Shortly thereafter, this individual was offered an opportunity to head up the family office as its chief investment officer. This individual’s background is unique and perhaps indicative of how wealth creators can join forces and collaborate in an innovative family office.

The CIO is a first-generation American and a second generation of wealth, as his father immigrated from Asia to earn a PhD through an Ivy League program in the 1970s and eventually started a medical services company that grew significantly.

The family sold the firm in the 1980s and managed their own assets at the onset. However, as an inexperienced investor, they encountered both investment successes and failures. They became appalled by the lack of transparency and the fees associated with their equity trading. They decided to seed and fund a new firm, which was taken over by the sons, to create a software program that would consolidate all public equities listed on global stock exchanges. In addition, the family also created a broker-dealer and clearing firm. This provided an efficient and cost-effective platform that marketed to active day traders in the late 1990s. The firm profited from the volume of trades made on a low-cost transaction fee basis, and this strong cashflow allowed them to sell the firm for a significant sum in the early part of this century.

This sale positioned the younger of the founder’s two sons to create and direct the family’s own single family office. While the older son worked on direct private deals, the younger son—who later became CIO of the family office profiled here— focused on public securities.

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