We asked half a dozen family office leaders if they had found specific types of investments to be particularly effective in engaging the next generation. Their responses illustrate the variety of ways investments can be used to increase family engagement:
Our direct investments, or private investments, are always more interesting to family members than our managed equity accounts. About 40% of our portfolio is in private investments. We hold a separate meeting annually to discuss these companies with shareholders, and it is well attended, either virtually or in person. We encourage next generation attendance, as well, and are interested in hearing their input on what is important to them. (Clean energy and technology are always topics). We spend most of a day exploring the investments in depth, often hosting the CEO or other key person. I also set up a committee of NextGens to evaluate private investments in West Virginia, through a venture capital group. This allows them to form stronger bonds and work together to make a difference in our state.
— Nancy P. Bruns, chairman of the board of the Dickinson Group
In addition to the substantial continued investment that our family makes in our legacy operating business, Centier Bank, we are highly active in making direct investments in non-bank financial service firms through 119th Street Capital, which we started in 2022. Our family has a long history of entrepreneurship that spans six generations, and 119th Street is the latest iteration of that spirit. Through 119th Street, we look to partner with growth-oriented leaders and entrepreneurs in spaces like wealth management, public accounting, insurance and other related industries where we can leverage all our legacy knowledge as well as our network of industry contacts. It has been fantastic — and, candidly, a lot of fun — to experience the engagement from others in the family at 119th Street. This includes my brother-in-law, Chris Campbell, who currently serves as a partner at 119th Street and is one of our investment committee members; my sister-in-law, Stephanie Schrage, who previously served as an investment committee member; and my father-in-law, Mike Schrage, who is a partner of 119th Street. The support of the fifth and sixth generations of the family has been fantastic, and I know we are all proud of the meaningful work that we are doing to ensure that the sixth generation adds to the family’s legacy of entrepreneurial pursuits and the stewardship of world-class cultures and organizations.
— Anthony R. Contrucci, president, First Bancshares and managing partner, 119th Street Capital
For us, impact investments have absolutely been the most effective type of work in engaging our next generation. They’re motivated by opportunities that they see ‘changing the world’ that we can partner with. We found that when the opportunity aligns with the vision the family shares to steward their wealth in a way that betters the world, our people are all in.
— John Michael “JM” Elder, president and chief investment officer, Wellspring Family Group
No. Our NextGen seems most engaged around family office activities and family history. While some of them are interested and engaged via our investment program, it’s not any specific investment area that has led to that engagement.
— Josh Kanter, president, Chicago Financial, Inc. (a single-family office), and founder and CEO of leafplanner
Our family utilized a cousin’s investment company to teach investment education to the current emerging owners. The company itself was designed to teach about investing, while also providing the opportunity for my generation to earn income. The process itself was engaging, and while there wasn’t a particular investment type that was more interesting to the group, it was the personal connection to the investments we were making that stood out. For example, we often held competitions within a category of investing — say emerging markets. Each member would do their own research and come up with an investment opportunity that fit the criteria. The company would make the investments, and we would track the results over time. It was the hands-on element that was engaging, not the specific investment category itself.
— Bryn Monahan, senior consultant at Relative Solutions and fourth generation family/board member, Foster Holdings
Absolutely. When I was conducting research for my latest book, I interviewed over two dozen family office principals — and over and over, I heard anecdotes on how there are generally two areas that are of high interest to members of the next gen (those in their 20s and 30s): direct investing in startups and sustainable investing (which can be achieved in all asset classes). Thus, where those areas overlap — impact investing in early startups — is a great example of an activity that the family office may pursue to engage or start a NextGen in the family office.
— Scott Saslow, founder and CEO, ONE WORLD Investments and author of ‘Building A Sustainable Family Office’
