Nathan Myer’s family sold their 94-year-old family business, Universal Electric Corp., which made electrical distribution systems for data centers, in 2019. Since then, his branch of the family has redesigned their family office and moved to Puerto Rico. He explains how they have structured their family office to keep the family together while preserving flexibility for individual family members.
Why did you create a family office when you sold the business?
From my vantage point on the board of our 94-year-old family business, I felt a continuation of our industriousness and generosity would be a necessity. My mom’s generation (G3) had matured our family business governance over the past 30 years. My generation (G4) grew up in quite an ideal family business environment, with vision and values, employment policies, family councils, next-gen training, codes of conduct, a professionalized board of directors, etc. This business identity and family legacy are assets we didn’t want to lose after the sale of the business.
So about 1 and a half years before the sale, as we were considering selling, I began to engage with my mom to design a new family system to launch within our branch after the sale. Once confidentiality of the sale ended, our new financial family design continued to improve with input from my three siblings.
How is your family office set up?
We thought to use the company sale as an ideal transition of wealth accountability from G3 to G4. Our branch family intentionally designed the new system to enable the G4 to be at the forefront of the new challenge as a financial family rather than the previous 94-year challenge as family business owners.
We are now in our sixth year of implementation of our G1 Family System. We call it the G1 Family System because it more resembles the environment of the original wealth creators, family business founders, than the typical cousin consortium. It enables each person in my generation to take accountability, like a founder/CEO, within their own mini-family office. For example, currently I’m investing in public investments as well as alternative and private direct investments.
It’s fully decentralized for wealth accountability. We have five separate entities, with decision-making authority completely separate. That’s the key to making us come together in a happy way.
We use shared services: Our accountants are the same, our financial statements are the same, the metrics and targets for distribution are the same. The way we account for how much we’re each committing to philanthropy is the same, but who we give it to has nothing to do with the others. We all use at least one of the same brokers, who provides discounts due to our size.
What is your goal for your investments through the family office?
I want to provide each of my children the same wealth that I came into, adjusted for inflation. I want each kid to have a financial engine that they would be able to be CEO of, a trust instead of a business. I don’t want to just break even — I want to be part of a generative generation that grows the family’s wealth. The three previous generations were so impressive. The blessing of what they have done is incredible. Is this a tall hurdle? Yes.
You have said your philosophy is “Live, Give, Leave.” What does that mean?
My mom, a key supporter in our long-term success, helped us agree to a long-term commitment of “Live, Give, Leave.” Live means that every generation has to have some kind of consumption mechanism. As for Give, we’ve been a pretty generous family, and we’ve elected to provide a certain portion annually to giving activities. Leave is specifically for the G5 kids in our family: It marks our commitment to pass on the legacy, identity and wealth.
Each area boils down to metrics: financial hurdle rates, targets and philanthropy minimums. For example, we aim to protect generational purchasing power through an inflation hurdle using a three-year rolling average of core PCE. We maintain a long-term mindset, true to our current 99-year family legacy.
Why did you move to Puerto Rico?
You can move here from the mainland U.S. and eliminate your capital gains tax. It’s almost imprudent not to move here. That’s the cool thing about my branch of the family: We are accountable to outcomes. When I showed them the business case for moving to Puerto Rico, what that would do for their tax burden for capital gains, they all moved here. It took almost no convincing. We have five houses in a beach resort town, Palmas del Mar.
What has been surprising or challenging on this journey?
One of the bigger headwinds has been balancing the idea of “we’re in it together” vs. “in it alone.” Each individual has separate accountability on every topic, but it does not mean we’re not in this together. We share the same challenges, and we can relate to each other.
We come together twice a year in a meeting we call our Center of Excellence. My mom plays a key ongoing role on the planning committee for this multi-day meeting that helps us improve each of our own mini-family offices. It’s a great environment to share updates on the projects we have chosen to do together as well as best practices and learnings for endeavors pursued individually.
One activity, to bridge the gap of feeling “in it alone” vs. “we’re in it together,” is the aggregation of our generative and generous activities. For example, we take the time to visually showcase 20 to 30 charitable organization logos on the same wall of our meeting room. Annually, we aggregate the financial gifts. Hearing the stories, seeing the logos and the large, combined impact makes me very proud to be a part of this group.
How do you think families can help each other navigate the transition from owning a business to investing?
For people liquidating a company with the next generation coming up and wanting to continue that legacy and identity as a financial family, what do you do? I would love to share more about our G1 Family System with families in comparable situations: those who have a highly developed next gen in their 20s to 40s who are learning to operate as a financial family rather than a single-family business-owning group.
