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LIDO INSIGHTS | How to construct your family finances as the sophisticated family offices do

Published 06-21-2021

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By Gregory Kushner


Most individual investors are relegated to invest in mainly mainstream investments like stocks and bonds.  As someone who has advised some of the wealthiest families in America (“family offices”) for over 25 years, I can absolutely state that with more money comes many more investment choices. These wealthy families do not just invest in stocks and bonds and sit back and watch their portfolios go up and down with the gyrations of the investment markets.  Rather, they are always looking to find good risk-adjusted returns, wherever they may be.  They invest in real estate, they make loans secured by assets like real estate or businesses, they invest in private equity and they often times hedge large, concentrated positions in publicly traded stocks.  The thing is, if an individual investor with significant wealth, say $1 million, $5 million, $10 million or even much more but not the typical hundreds of millions of dollars that these family offices oversee, can still gain access to these same types of investments.  There are wealth management firms that specialize in this family office approach that are sometimes referred to as Multi Family Offices (“MFOs”).  These MFOs research and perform due diligence on some of these more esoteric investments and then typically arrange for their clients to invest in a pooled vehicle to gain access to these investments usually reserved for these much wealthier investors.  For example, at my firm, Lido Advisors we have been providing our clients access to asset-based lending opportunities for well over a decade and have been involved with over $1 billion of these types of loans.  These are partnerships that make loans to real estate owners but unlike the traditional banks, they will make loans much more quickly and will loan against assets that might not be ready for the permanent financing that banks provide.  For example, perhaps an investor is buying a building at a great price with the idea of reducing vacancy and getting it leased to create value.  Many banks will not even consider making a loan unless the building is at least 80% leased.  In these instances, these so called “Bridge Lenders” step in and make loans, usually in first position with no more than 60-65% loan to value (i.e.,35%-40% equity).  Since these are short term (usually 1 to 1.5 years) there is very little interest rate risk (when rates go up, bond prices go down).  However, you are not lending your money to major credit worthy borrower.  That said, the credit risk is generally mitigated by the collateral and equity that the borrower would lose if the loan has to be foreclosed.

The point is, the investor who has a significant portfolio (over $1 million) can invest like these very wealthy family offices if they can identify firms that have expertise that can be shared and believe that all investors should be able to access the investments generally reserved for the uber wealthy.


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Lido Advisors, LLC is an SEC-registered investment adviser. Please note that SEC registration does not denote any particular competence or ability and no inference to the contrary should be made. For complete information on the services we provide and our fees, please review our Form ADV at adviserinfo.sec.gov, call (310) 278-8232, or mail us at 1875 Century Park East Suite 950, Los Angeles, CA 90067.

Past performance is not indicative of future performance. The information in this report is for informational purposes only and should not be relied upon as the basis of an investment or liquidation decision. Nothing in this report shall be construed to be a solicitation to buy or offer to sell any security, product or service to any non-U.S. investor, nor shall any such security, product or service be solicited, offered or sold in any jurisdiction where such activity would be contrary to the securities laws or other local laws and regulations or would
subject Lido to any registration requirement within such jurisdiction. All content herein has been obtained from sources deemed to be reliable, but is subject to unintentional errors, omissions and changes without notice, and is not warranted as to its accuracy or completeness. You should not rely on the information contained herein, and should rely solely on, and carefully read, the appropriate offering and related subscription materials relating to any specific investment product before making any investment decision.

Not all investments are suitable for all clients. It should not be assumed that any security listed or any recommendations made in the future will be profitable or without loss, including risk of loss of principal, or will equal any prior performance. All investments involve the risk of potential investment losses including the potential risk of loss of principal as well as the potential for investment gain. Further, the prior performance figures indicated herein represent portfolio performance for only a short time period and may not be indicative of the returns or volatility each portfolio will generate over a long time period. The performance of the portfolios should also be viewed in the context of the broad market and general economic conditions prevailing during the periods covered by the performance information. Any references to future returns/risk are not promises of the actual return the client portfolio may achieve. Before investing, investors should seek financial advice regarding the appropriateness of investing in any securities of investment strategies discussed. Not all investments are suitable for all investors.

The information herein is not legal, such as trust or estate planning, advice, or tax advice. Any such information is provided for illustrative purposes only and must not be relied upon without the benefit of the advice of your lawyer and/or tax professional. Lido specifically disclaims any liability from any reliance on such information. Lido is not a legal service provider or tax professional and does not offer legal or tax advice. Should you desire to obtain tax or legal services or advice, you must enter into your own, independent
engagement agreement with a licensed attorney or tax professional.

Lido specifically disclaims any and all liability arising from the information or illustrations presented in these materials and is not responsible for the consequences of any decisions or actions taken as a result.

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Lido Advisors, LLC is an investment advisor registered with the Securities & Exchange Commission. SEC registration does not denote competence, ability, or expertise.  As an SEC-registered advisor, we are required to publicly file certain information with the SEC as well as furnish or provide you with the opportunity to obtain information about our principals, employees, products, services, and fee schedules.  Please review our Form ADV, which provides this information, at adviserinfo.sec.gov, call us at (310) 278-8232, or mail us at 1875 Century Park East, Suite 950, Los Angeles, CA 90067 for a copy of our Form ADV.

The future is uncertain and cannot be predicted.  Past performance is not indicative of future performance. These materials are provided for informational and illustrative purposes only and should not be relied upon as the basis of an investment decision. You should not construe this as investment advice or an offer to buy or sell securities.  All content herein has been obtained from sources deemed to be reliable, but is subject to unintentional errors, omissions and changes without notice, and is not warranted as to its accuracy or completeness. You should not rely on the information contained herein, and should rely solely on, and carefully read, the appropriate offering and related subscription materials relating to any specific investment before making a decision to invest.

Not all investments are suitable for all clients. Investing carries a risk of loss, including the complete loss of principal. Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be profitable or suitable for your financial situation or risk tolerance.  Any references to projected or future expected returns or risk are not guarantees, promises, or assurances that these outcomes will be achieved.  Before investing, you should seek financial advice regarding the appropriateness and suitability of the contemplated investment as not all investments are suitable for all investors.

We do not provide legal or tax advice.  Any investment has tax and legal consequences.  You should consult with a licensed professional prior to making any investment.

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