Raising capital from family offices
Merchant Bank Mandate: Dan on Surviving and Advancing
Ultra-Wealthy Private Investor & Merchant Bank Mandate Interview
Capital raisers and sponsors who want to understand how a family office with a merchant banking arm thinks about deal size, flexibility and staying power.
What stood out
- Merchant banking means co-investing. Dan says many firms claim to be merchant banks. His firm has Fortune50 clients and invests its own money alongside them. He ties the model back to the Rothschilds in the 1800s.
- Checks are very large. Dan describes the firm's stroke as $100 million checks. He says it is not out raising 25 grand at a time. Deals too big for the firm's own checks are taken down with another partner.
- Stay agnostic to stay in business. Dan credits over 18 years in business to being agnostic. He built the firm with credit, real estate, energy, corporate and private equity products so he could serve any investor who asked.
- Flexibility matters in uncertain times. Dan says the best people right now are flexible and open-minded. He adds that his biggest deals came from places he did not expect. The firm is also removing some asset classes and markets from its list.
- Survive and advance. Dan borrows the phrase from his college basketball days. He says you have to create value and keep going, because the successful years only come if you are still in the game.
What this talk covers
Dan runs a multistrategy private equity family office that also does merchant banking. He says his clients include Fortune50 companies and that the firm co-invests its own money. The typical check is $100 million, and the firm does not raise small amounts such as 25 grand at a time. He compares the model to the Rothschilds in the 1800s, who banked only the wealthiest clients.
Dan has stayed in business over 18 years by staying agnostic across credit, real estate, energy, corporate and private equity. The firm has met thousands of CEOs and done almost 100 deals. His main advice is to survive and advance, a lesson from college basketball. He says an investor has to stay alive long enough to have the years when the big wins come.
Facts and figures
- Dan's firm has been in business over 18 years and has done almost 100 deals.
- Dan says the firm's typical check is $100 million, not 25 grand at a time.
- Dan says only 20 companies out of 10,000 make over five million a year.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Ultra-Wealthy Private Investor & Merchant Bank Mandate Interview. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Said on the call
"We really do have clients in the Fortune 50, and we really do co-invest our own money."
"To be in this business, I think now, in uncertainty, the best people are the ones who are flexible and open-minded."
"I have to survive and advance. I have to create value, and I have to turn things that have no value into value, or there's no role for me in this market."
Related questions
- Do family offices co-invest alongside other investors?Yes, many family offices invest alongside other investors, and they often feel more comfortable when another respected investor is already in the deal.
- Do family offices invest in funds or only direct deals?Family offices do both.
- What deal sizes do family offices typically write?There is no single typical size.
Questions about this video
What is the merchant banking model according to Dan?
Dan says his firm has real clients in the Fortune50 and co-invests its own money. He links the idea to the Rothschilds in the 1800s, who banked only the wealthiest clients and co-invested.
What deal size does Dan's firm work with?
Dan says the firm typically writes $100 million checks. When a deal is too big for its own checks, it brings in another party to take it down.
What is Dan's top advice?
Dan's advice is to survive and advance. He says you must create value and stay alive in the business to be around when the big wins arrive.
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