US Single Family Office

UHNW Single Family Office (SFO) based in the US is building an endowment-style portfolio, looking for sub $150M venture funds, and invests across Private Equity, Real Estate and Credit.

The insights below come from a conversation with an Investor at an Ultra-High-Net-Worth (UHNW) SFO based in the US.

Investment Philosophy

• In for the long haul: Underwrite for the next 10-20 years. Invest early and scale as firms grow.

• Endowment model: Building a self-sustaining model over the next 7-10 years. Expect to offset liability of capital calls and replace dividends through their private markets portfolio.

Portfolio Construction 

• 60% public equities & cash

• 40% alternative portfolio

  • 40% venture capital

  • 30% private equity

  • 20% real estate

  • 10% private credit

Venture Portfolio

• 10-15 emerging funds, primarily seed / pre-seed, sub $150M (avg. check size $1M-$5M)

• Secondary LP positions in various funds to shorten timeline to liquidity

• Ownership focused, with 5-10% on the look through
  

Looking Forward

• Sub $150M funds with proven track record (DPI)

• Prefer frontier / deep tech (vs. generalist / SaaS). Highly technical GPs who are looking for urgent problems, e.g., climate, healthcare, TechBio, defense, manufacturing, logistics, etc. 

• US-based funds (no emerging markets)

Lessons Learned

• No free passes: Re-ups are reviewed & diligenced with the same rigor as any new investment.

• Relationships compound faster: Prefer to invest earlier, in smaller funds (vs. larger / established funds) since it’s easier to develop deeper relationships with those GPs and win access to future funds and opportunities

• Follow process with room for flexibility: Do the work required to source & diligence investments, but don't be too much in a box to where it inhibits your ability to execute on deals with high conviction.

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🙏 Special thanks to the Investor of this SFO for sharing their insights (shared with their permission, on the condition of anonymity).

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