How a Wealth Manager Screens Alternative Investments for Clients
Alternative Investment, Real Estate, and Private Equity RIA Investor Mandate Interview
Fund managers, real estate sponsors and capital raisers who want to understand how a wealth management adviser decides which deals to bring to clients.
In their words
"the risk profile of the fund or the investment lines up with the risk profile of that client's specific goal with that investment."
"Some people with great track records can get cocky, can get foolish and make mistakes. And some people that are very, very new, have a really great process."
"Ask them how they're paid. I think it's a very important thing to know. Is there a conflict?."
The short version
Christina, a wealth manager in Silicon Valley, says the first test for any fund is whether its risk profile matches the risk profile of the client's goal for that money. Her firm was founded in 2007 and serves clients mainly in California and western Nevada. It has no bias toward any asset class and looks at real estate, private equity, startups, stocks, bonds and ETFs.
She also covers how she weighs track records, why large industrial warehouses suit nationwide diversification, and why local residential rentals suit owners who manage them. She advises investors to ask any adviser how they are paid. Richard C. Wilson interviews her for the Family Office Club, and she ends by stressing that trust matters most when markets turn uncertain, as in 2020.
From the source
- Christina's firm was founded in 2007 and serves clients mainly in California and western Nevada.
- Her clients invest in large distribution warehouses, which she says are best held diversified across the country.
- The Family Office Club has roughly 700 to 800 members, ranging from short track records to 20 years of experience.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Alternative Investment, Real Estate, and Private Equity RIA Investor 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.
Talk to a securities attorney to explore options around adviser compensation disclosures, investor eligibility rules and offering documents. Do not use AI to write your own legal agreements.
The 5 big lessons
- Match risk to the client's goal. Christina says the most important step is lining up the fund's risk profile with the risk profile of the client's specific goal. Some clients want upside. Others want stable income with little risk.
- Track record matters, but not alone. She looks at the track record of the individuals, even for a new investment pool. Some people with great records get cocky and make mistakes. Some newer managers have a really great process.
- Location depends on the asset. Clients who manage residential income properties themselves tend to want them nearby. For larger deals, she says location matters less. For large industrial warehouses, she says to diversify across the country.
- Clients seek diversification. Silicon Valley clients often want to diversify out of concentrated stock positions. Real estate developers often want to reduce how much of their wealth sits in fixed assets.
- Ask how an adviser is paid. Christina suggests asking any adviser how they are paid and whether there is a conflict. Her firm is paid only by clients for services provided. She also says to check that you connect with the person, since trust matters when investments do not perform as expected.
Related questions
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
- How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.
Questions about this video
What does Christina check first when reviewing a fund?
She checks that the risk profile of the fund or investment lines up with the risk profile of the client's specific goal. She also looks at the track record of the individuals.
Does a deal need to be local to the client?
It depends. Clients who manage residential income properties themselves tend to want them nearby. For larger deals, she says location matters less to them.
How should an investor choose a wealth manager?
Christina says to ask how the adviser is paid and whether there is a conflict. She also says to find someone whose philosophy and process you connect with, and to confirm their technology can handle virtual meetings.
Put this into practice with the how much to raise calculator. See all investor mandates resources.
