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CRE Insights Blog

Leverage Multiple Trends and Rising Tides at Once

On a recent trip to India to speak at a couple of Family Office conferences, Richard recorded this video on how to read the market and leverage the current trends. Hello, this is Richard Wilson coming to you from Mumbai, India. I’m here to speak at a couple of family office events. I run the Family Office Club, and I wanted to record this quick video for you on the importance of maximizing your effectiveness with your investment strategies and your operating businesses by leveraging multiple sub-trends and macro trends at a time. This came up at our recent event at Capital Con because we had someone on stage who had raised $60 billion, that’s billion with a B, over his career with his firm. It’s called Eaton Partners. And Charles Eaton, the founder of the firm had been in the placement agent, third party marketing industry, which if you don’t know what it is, is basically raising capital for investment fund managers. He’s been in that industry for close to 40 years now. He really helped form, formalize and grow that space. Not that he invented it or is the first person to come up with the idea. But he’s one of the most successful out there in the space. And what’s interesting is he said that it is a lot of blocking and tackling and it was taking advantage of this new model of outsourcing the capital raising by fund managers. And also there is the trend of more institutional capital providers just starting to allocate to fund managers. In fact, he brought up an example of being one of the first people to take a hedge fund manager and raise institutional capital, which basically means you can raise 10, 20, $50 million checks at a time instead of 1 to $3 million checks at a time. And so that was really critical. And what came out of it was that he leveraged multiple growing trends and sub-trends, rising tides, to really grow his business; the placement agent trend and the trend of institutional fund managers, or institutional investors investing in hedge fund managers and private equity fund managers. And I thought that was really cool to see. You can see many examples of people who become billionaires instead of millionaires, also leveraging multiple trends obviously. You know, Zuckerberg, the growths of Facebook and social media. You look at Steve Jobs and Bill Gates, so the gross growth of personal computing, and music and handheld devices and smart devices like the iPhone. Obviously there’s a million people like Zuckerberg who tried and they MySpaced out into nothing before they were ever known as anything nearly as big as a MySpace. But, the point is that some of the most successful people had to play off of existing growing trends and sub-trends that are going on, as well as be really smart about it and execute well and have an excellent team, and have some good luck along the way. And what I think is really interesting is that lots of people who raise capital say, “Oh, we had to talk to 500 investors to find 12.” Or, “We had to talk to 800 to find the five,” or, “We talked to 300 to find the one.” And these are some of the people in the business who’ve been raising capital for 20 years and have raised $1 billion-plus in capital. We had many of those at our past event on stage. $1 billion-plus in capital and they’re still reaching out to 500 investors to find the 12. And these are the same 500 investors they’re speaking to every year. So they’ve a pretty good idea about what these people want. And so they’re trying to choose the best fund manager to raise capital for. They’re speaking to these people in the right way. They know what’s inside their portfolio, they know what they want and don’t want to a degree. And they’re still taking that long to raise that much capital.

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Richard Wilson