Raising capital from family offices
Multi-Family Office Mandate: Opportunity Zones and Private Funds
Midwest Multi-Family Office Investor Mandate Interview on Opportunity Zones & Fund Manager Investing
Real estate sponsors, fund managers and private equity operators who want to understand how a Midwest multi-family office sources deals and thinks about opportunity zones.
What this talk covers
A multi-family office in Sioux Falls, South Dakota, invests directly in private real estate and private equity. Jose explains that the team sources deals through its own network and conferences. It prefers deals where it knows the developer, the property manager or the asset. That keeps its focus on the Upper Midwest, including Minnesota, Nebraska, Iowa, the Dakotas and some western states up to Colorado.
Jose also covers opportunity zones, impact investing and how the virus crisis changed real estate pricing. The team expects higher hurdle rates for new builds and shares views on how private equity relates to opportunity zones. The closing thoughts cover the cost of large public equity holdings and the appeal of private funds over single property deals. Richard C. Wilson hosts the interview.
What stood out
- Invest where you know the people. The office likes to invest with what it knows. That means a known developer, property manager or asset. This limits the team mostly to the Upper Midwest.
- Networks and conferences source deals. Deal flow comes mainly from the team's network and from attending conferences. Jose says there is real value in networking for deals and learning what others are doing.
- Opportunity zones and private equity. Jose shares his view on how opportunity zones relate to private equity as well as real estate. Richard notes that few people he knows discuss the private equity side. The team is looking to partner with people who think that way.
- Repricing raises real estate hurdles. Jose says public market moves lead to a comparable repricing in private real estate. Hurdle rates for new builds rise as a result. The team expects more interest in fixing up existing property than building from scratch.
- Prefer private funds to single deals. Jose says investors in single property deals with a friend or promoter tend to underestimate risk and overestimate return. Jose often prefers a diversified private fund unless the investor is very close to the parties involved.
Quotes from the session
"We like to invest with what we know. Right there, we know the developer if it's real estate, or we know the property manager, or we know the asset."
"People tend to underestimate the risk and overestimate the return."
"The hurdle rates for any kind of real estate project are going to be higher, because you have much higher expected returns on the public side and on existing properties."
Facts from this talk
- The office runs its own public equities portfolio of 25 to 30 names and holds short duration municipals on the fixed income side.
- The team's geography covers Minnesota, Nebraska, Iowa, the Dakotas and some western states up to Colorado.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Midwest Multi-Family Office Investor Mandate Interview on Opportunity Zones & Fund Manager Investing. 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.
Talk to a securities attorney to explore options around opportunity zone rules, private fund structure and investment tax considerations. Do not use AI to write your own legal agreements.
Related questions
- How long does a family office take to make a decision?There is no standard timeline, and I would not trust anyone who gives you one number.
- How do I find the decision maker at a family office?Start by meeting the family through advisors, events and the people who manage their investments.
- 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.
Questions about this video
What type of firm is Jose's team?
It is a multi-family office in Sioux Falls, South Dakota. It manages assets for families across the country, mostly with ties to the Upper Midwest. Most clients are business owners or families that sold a business.
How does the office find private deals?
Mainly through its network and by attending conferences. The team prefers deals where it knows the developer, property manager or asset.
What is Jose's top piece of advice?
Jose talks about how large investors think about the cost of their public equity holdings. On the private side, Jose favors diversified private funds over single property deals.
Put this into practice with the one-liner builder. See all raising capital from family offices resources.
