Michael Ashley Schulman, CIO and Founding Partner at Running Point Capital Advisors (a multi-family office), shares his journey from a childhood stock trader to a seasoned investment strategist. Schulman offers deep insights into the evolving landscape of private assets and how affluent families are navigating wealth management in today’s complex financial environment.

Key Themes & Takeaways

1. The Evolution of Private Markets

• Over the past two decades, private markets have matured significantly.
• Growth in private credit, secondary markets, and venture capital has diversified investment opportunities.
• Real estate remains relatively stable, while other asset classes have seen innovation and expansion.

2. Family Office Trends

• Families typically enter Running Point with 0–5% allocation to private assets.
• Schulman recommends a 20–40% allocation, tailored to each family’s goals and risk tolerance.
• Transitioning to higher private allocations is gradual and opportunity-driven.

3. Education Beyond Investments

• The real education lies in understanding family priorities, not just asset classes.
• Schulman emphasizes building a holistic financial picture—including assets, liabilities, lifestyle goals, and legacy planning.
• Investment strategies are likened to choosing a route on Google Maps: scenic, fast, or off-road—each with its own risk and reward profile.

4. Volatility vs. Real Risk

• Schulman distinguishes between market noise and true financial risk.
• Real risk is the inability to meet liabilities, not daily price fluctuations.
• Cash flow is king—especially in private investments that generate income despite being illiquid.

5. Private Credit: A Deep Dive

• Private credit is a broad category, akin to saying “I like mutual funds.”
• Schulman favors opportunistic, covenant-heavy private credit that offers equity-like returns with less risk.
• He also has a strong understanding of CLOs (Collateralized Loan Obligations) from his time at Deutsche Bank.

6. Manager Selection Criteria

Schulman’s four pillars for evaluating investment managers:

• Smart: Deep expertise and insight.
• Niche: A clear area of specialization.
• Systems: Robust infrastructure and risk controls.
• Selection Process: A rational, explainable investment methodology.

7. Tax Optimization Strategies

• Tax planning can yield more value than investment returns.
• Schulman highlights Private Placement Life Insurance (PPLI) as a powerful tool:
  • Tax-free compounding
  • Access to bespoke investments (e.g., private credit, hedge funds)
  • Multi-generational wealth planning
  • Liquidity options through borrowing or withdrawals

8. Psychology of Wealth

• Families are most sensitive to taxes, more than fees or returns.
• Structuring investments to minimize tax impact is a top priority.

9. The Future of Wealth Management

• Rise in single-family offices is outpacing talent availability.
• Multi-family offices will grow, but true holistic firms remain rare.
• Industry is seeing consolidation, driven by private equity and economies of scale.
• Schulman sees value in boutique firms that offer personalized, proactive service.

Key timestamps:
00:07 Introduction to the Fireside Chat
01:41 Trends in Private Asset Allocation Over Two Decades
03:06 Family Office Dynamics in Private Capital
05:41 Educating Families on Investment Strategies
09:10 Understanding Volatility and Risk in Investments
10:55 Diving Deeper into Private Credit
15:38 Assessing Investment Managers and Their Track Records
17:30 Tax Optimization Strategies for Wealth Management
20:08 Cost Benefits of Private Placement Life Insurance
21:25 Multi-Generational Wealth Building Strategies
22:45 Evolution of Private Placement Life Insurance
23:33 Psychological Factors in Wealth Management
24:53 Future Trends in Asset Management
26:29 The Role of Boutique Multifamily Offices
28:02 Conclusion and Closing Remarks