CYMI Holdings is the family office of the Mathile family, the former owner of pet food maker Iams. Jill Barber has worked for the family office for 24 years and became president four years ago. In this week’s Q&A (part one of two), she discusses the family office’s history, scope, and governance.
How did CYMI Holdings get started?
In 1996, Clay Mathile heard people talking about family offices at an AMA conference. He became really interested: He had no heir apparent who wanted to run Iams. At the time, Iams distributed pet food through specialty stores and veterinarians. Knowing the time, effort and money it would take to put a mass distribution plan in place — and after many conversations with his wife and the G2s — they decided to sell the company and started a family office to be prepared for that eventual sale, which happened in 1999, when Iams was sold to Procter & Gamble.
Who does your family office serve?
We serve the two G1s, nine members of the second generation, and 18 members of G3. G2 includes five grown-in members plus four married-ins. G3 is 15 grown-in members plus three spouses. We now have one G4 member, as well. Our married-ins are seen as family members and as clients.
What services do you offer?
The four legs of our stool are investment management, wealth advisory services, a private trust company, and a direct real estate program.
Investment management: The philosophy of the family is that we want you to be together as a family, not because our money is all tied together. Family members have a constant ability to leave the family office— we have to earn their business every day.
Different from many families, we do not have a large pot trust that the entire family benefits from. The wealth is in individual trusts with individual beneficiaries. We have multiple asset bases. We use investment partnerships for economies of scale and to get access to high-quality managers.
We have a separate investment policy statement for each of the family members. It’s customized to each individual: what their risk tolerance is, what their goals are, and what they hold outside these partnerships. We take all of those and roll them up so each family member is a partner in a larger partnership. For example, every family member wants to invest in U.S. large cap stocks, but each one has a different allocation of them in their overall portfolio. You take the sum of all those pieces, like U.S. large cap, and our team will invest in four or five managers. Everybody gets a piece of those managers. It starts with the client, instead of starting with the money.
Wealth advisory services: In wealth advisory services, we have a holistic view of what’s happening. We see where cash is coming in and going out, we see their budget, we know how much they’re spending. We do structuring of M&A deals, tax strategy, estate planning, financial planning, cash flow. We spend a lot of time in the planning space.
We also focus on learning. We will bring in different resources depending on the area of focus. It could be helping them write a LinkedIn page, learn about the trust they’re beneficiaries of, apply for a mortgage, work with a trustee, or have a difficult conversation.
Especially with the third generation, this learning component looks at: How do they understand this wealth, and how do they navigate their life with it in it? We teach them to fish – we don’t fish for them. How do you think about getting a mortgage on your house? We’re there as a partner walking alongside them to help them figure out how to navigate these things.
We try to stay away from a lot of concierge services – we don’t pay bills for people, and we only do some travel. But we’ll help them figure out how to solve a problem any time of day.
Private trust company: This company will be the trustee for all the family’s trusts. Instead of having an outside third party that doesn’t really know the family or an individual who will eventually retire, we have people who already know the family. They have a full view into the beneficiary’s picture without any knowledge transfer. This gives the family a single point of contact to work with on all aspects of their financial life.
Direct real estate: This is a family-wide program that we’re building as the next wealth generator for the family. The overall purpose is to evolve the wealth story of the Mathile family by creating a long-term diversified real estate platform, focused on long-term value creation, community impact and capital expansion for all generations. Within each family member’s IPS, we understand the risk budget available for these types of investments and work with the family as opportunities arise to determine their allocation to each investment.
We are in the initial phase of building out this program. Today, our program is based more geographically than on property type. We are looking to partner with other seasoned professionals on regional opportunities that meet our investment criteria. Within that, the opportunities that we are most interested in are commercial, multi-family, industrial and hospitality.
What does your governance look like?
Clay was different from a lot of entrepreneurs in that he decided he was going to retire at age 70. On his 70th birthday, he turned over responsibility, authority, and control to the second generation, and they have governed the family office ever since. Today he is a wonderful client of our office and a great source of wisdom and knowledge, but he does not make decisions – the second generation does.
Now we are in the middle of transitioning to multigenerational governance, including the G3s. We’re talking about what the next version of governance looks like.
Like many family offices, we’re an LLC. We have a manager, one of our G2s. We also have a board of advisors that our manager relies heavily on. The board consists of five family members plus four outside, independent people. Two of those are individuals who run family offices. One is a consultant to multiple families. And one is a family member of a high-net-worth family. Until recently, the board had three G2s and four outside members; the two G3s were added in July 2022. They are in conversation right now about how to rotate the G3s on the board to provide growth opportunities for all interested members of that generation.
(Part two of this interview will appear next week.)