In an ION Influencers fireside chat hosted by Giovanni Amodeo, Wendy Craft, CEO of Elle Family Office, shared her extensive experience and insights on building trust within family offices. With over 25 years in the industry, Wendy provided a wealth of knowledge on the nuances of family office operations, trust-building, and investment strategies.

Wendy Craft’s Background

Wendy Craft has dedicated a quarter of a century to the family office sector, including over 20 years with a New York City family office before joining Elle Family Office in Georgia. Elle Family Office manages diverse assets, including car collections, art, jewelry, distressed real estate, and various funds.

Key Topics Discussed

1. Educational Milestones for Working with Family Offices
   • Wendy emphasized the importance of diverse backgrounds in family offices, particularly from financial and legal sectors. She noted that trust often begins with personal relationships within the family’s operating company.
2. Differences Between Family Offices and Institutional Money
   • Institutional money is characterized by a corporate approach focused on returns and risk management. In contrast, family offices prioritize trust and personal relationships, often leading to long-term commitments and introductions to other families.
3. Building Trust and Relationships
   • Trust is foundational in family office investments. Wendy highlighted that families prefer to invest with individuals they know and trust, and successful investments often lead to referrals within their network.
4. Leveraging Family Expertise
   • Wendy discussed the value of involving family members with expertise in specific sectors, such as technology, in advisory roles to enhance investment success.
5. Challenges of Commingling Funds
   • Families often prefer separate funds or sidecars to avoid being overshadowed by larger institutional investors. Wendy shared strategies for managing these preferences to maintain family office satisfaction.
6. Evolving Due Diligence Practices
   • Wendy noted the increasing importance of cybersecurity and privacy in due diligence. She emphasized the need for robust cyber insurance and protection measures as critical factors in investment decisions.
7. Assessing Fund Managers and Succession Planning
   • Wendy stressed the importance of evaluating fund managers’ track records and succession plans. She shared insights on the red flags to watch for, such as rapid fund size increases and lack of clear succession plans.
8. Investment Preferences and Trends
   • Real estate, particularly distressed commercial properties and hotels, remains a strong focus for Elle Family Office. Wendy also highlighted a growing interest in venture capital, driven by the adaptability and innovation seen during the COVID-19 pandemic.
9. Future Skill Requirements
   • Looking ahead, Wendy predicted a rising demand for professionals skilled in AI, technology, and cryptocurrency within family offices.

Key timestamps:
00:08 Introduction to the Fireside Chats
01:11 Building Trust with Family Offices
02:09 Family Offices vs. Institutional Money
03:59 The Importance of Relationships in Investments
05:54 Creating Special Relationships with Families
07:49 Evolving Due Diligence Practices
10:06 Evaluating Track Records and Performance
14:08 Managing Investment Opportunities
16:40 Market Trends in Fees and Structures
19:02 Transparency in Fee Structures
21:09 Shifts in Asset Class Preferences
23:35 Real Estate Investment Insights
25:27 Key Roles in Family Offices
27:04 Emerging Skills for Future Family Offices