Family Office Investment Success

Ryan Begelman shares a story about his friend who took an unconventional approach to managing his wealth after selling his business.

"A friend of mine made a similar amount of money to what I made selling my media company. In 2016, instead of just hiring a wealth manager, he hired two hedge fund guys - an analyst and a senior associate VP level person from a hedge fund. He paid them collectively about half a million in salary per year, plus carried interest and upside.

At the time, I thought it was the craziest thing I'd ever heard. It was like the world's smallest family office - he had only low eight figures in wealth. But what was smart is he had a good network and deal flow, similar to us, but didn't have time to underwrite all the deals, run financial models, or do proper due diligence.

The strategy ended up being incredibly successful. His big cloud investments are now worth about 100x their initial value. What seemed like an outlandish expense for someone with relatively modest wealth (by family office standards) turned into a massive success story."