How one student landed two Family Office internships   

Today it’s all about a student who is interning at two contrasting family offices. There are links for those seeking a family office career and an exciting announcement.

The Intern:

“I am a student majoring in finance and econ, though I recently began weighing the pros and cons of switching to some kind of engineering program. There is still an intent to work in finance, but a STEM undergrad (likely followed by an MBA or JD/MBA) would give me more career optionality and additional paths on Wall Street. With everything happening in the global economy and with advancements in technology, it just feels like a good time to reassess things and possibly hedge.”

Mr Family Office: Switching majors is a big step, and while it’s certainly not necessary for a career in a family office, I have found that people with an interdisciplinary education bring a lot to the table (my first mentor was a qualified lawyer and accountant).

The Family Offices:

Family Office #1

Generations: 1^st generation wealth

AUM: >$30mn

Focus: Commercial real estate (multi-family, warehouse, strip mall), SFR rentals, stocks & mutual funds, operating company.

The people: the husband runs a home services company, the wife has a successful sales career.

“The couple did not grow up wealthy, so as a couple, they're experiencing significant wealth for the first time. Despite already achieving a high net worth, they're probably 15-20 years from retirement, so they are still focused on growing in their respective careers. The large paychecks fuel the overall portfolio, so I look at it as a mix of wealth creation, preservation, and, because they are incredibly philanthropic/charitable, a way that ensures they can continue to meaningfully give away.”

Mr Family Office: Arguably $30mn falls below the threshold of a true family office, but the question is where the family is going, not where it’s at. You would need to be in a leadership role to thrive at a family office with relatively low AUM, but the entrepreneurial and giving spirit of this family is a hugely positive signal.

Family Office #2

Generations: third generation

AUM: >$2B AUM

Focus: commercial real estate (multi-family, warehouse, retail, medical, student), private equity, private credit.

The structure: operating companies are held by the PE arm.

Wealth preservation, family education, and succession are a priority because this is a multi-generational family office.

The bread and butter of their wealth is real estate and the family members who care to be involved at all are involved in only that segment. The family office handles the other strategies and holdings.

Mr Family Office: On paper, with a high AUM, family office #2 will offer you the best opportunities for career growth and rewards.
 

How To Secure Two Family Office Internships

Family Office #1:

“Right Time & Place/Lucky/Value-add. I had an administrative office job by campus where I became close with one of the highest-producing sales associates. She and I would often speak about markets, and one day she asked me to take a look at her brokerage statements before she sent them to her CPA.

Something strange I noticed was that a few stocks were bought on margin. The positions were not large enough relative to other portfolio holdings, so it did not look like someone intended to apply leverage in order to maximize returns. Additionally, there was more than enough in money market funds, meaning those positions could've been bought without margin. Thankfully, the stocks had double-digit returns, but for about two years, the unrealized gains were being cannibalized by thousands of dollars in automatic, monthly interest payments.

After telling her, she immediately called her husband and put me on the phone with him. I explained what I found and he said, "Wow, I'm impressed with your attention to detail and knowledge. We'll authorize you on the account so you can fix this. Also, come to my office this weekend, I think I can use your help." 

He runs a successful home services company (electric, roofing, plumbing, HVAC, remodeling, pools, etc.) with about a dozen employees, but things were disorganized on the finance and technology side. Everything was written by hand in multiple notebooks and by multiple people. Receipts and checks would get lost, and everyone adjusted on the fly.

Though profitable, it was chaotic. It took me an entire summer, but I cleaned up the company's bookkeeping process, consolidated the bank accounts, and introduced software programs for managing payables, receivables, inventory trends, and individual job costs. I also introduced them to an industry-wide software tool that helps them while in the field with sales, record keeping, and collecting payments. After that summer, I was brought in closer and introduced to their CPAs and wealth advisor. Currently, I help them manage their various real estate holdings. Additionally, under the supervision of their wealth advisor, I was given autonomy over managing a portion of the brokerage investments.”    

Mr Family Office: The best way to connect and succeed with family offices is to lead with value and you have embraced this approach. You’ve shown initiative and problem-solving skills - that will take you a long way. Make sure you understand the strategic goals of the family and proactively seek to expand your responsibilities.

Family Office #2

“Fraternity Networking/Lucky. An alum of my fraternity posted in a group chat that he was looking for interns who are interested in a finance career. He explained that he works in the private equity division of a family office and was putting together a team that would grow the main portfolio company with an M&A campaign. Since joining, I've been involved in multiple transactions from start to finish, participating in the entire process from origination through integration.”   

Mr Family Office: You make your own luck in life… following through is underrated! The experience you're gaining in private equity and mergers and acquisitions is impressive and not commonly available to many at your level. The relationships you build now with the family and your direct supervisors will be crucial - whether you stay in the family office after graduation or not.

Internship - The Terms of Engagement

Family office #1: part-time, weekly calls as-needed depending on the project, monthly stipend + annual bonus.

Family office #2: part-time, weekly meetings and hours as-needed depending on the project, school credits + annual bonus.

“I still have to work a regular part-time or full-time job to cover my expenses. These are not traditional summer internships at top tier investment banks, hedge funds, or private equity giants that pay a sexy salary. I'm doing these internships because they're giving me hands-on experience and setting me up for the next thing, whatever that may be.”

Mr Family Office: This is the right attitude. While many family offices are highly cost-conscious, the commitment you are showing could lead to significant rewards later on. Even if you end up in banking/PE/VC, the FO experience will be invaluable.

The Challenges, The Tedium and The Laughs

“Sometimes, certain aspects of the work are incredibly tedious because a project (like an acquisition or evaluating a potential real estate purchase) is naturally going to take a long time. Being efficient while also being patient is so important but, yes, it could feel mindless and boring at times. I have to remind myself that this is not a sexy, exciting ten-people-in-an-apartment-living-room tech startup where everyone is wearing multiple hats and doing a hundred things while hopped up on too much cold brew. Taking breaks by going on walks has helped.

The biggest lie ever sold to investors was that investing in real estate means you collect passive income. While helping Family Office #1 with managing their real estate portfolio, I've dealt with a tenant who passed away in the condo (thankfully of natural causes), a tenant whose income was inexplicably inconsistent and always paid in cash, a tenant who was a hoarder, and a tenant who never cleaned up after her pets. The cost of repairs, even when done by the husband's business, will eat into the rental income. Real estate is not for the weak.  

In Family Offce #2 our intern team is completely remote, we were flown in to finally meet each other, executives from the portfolio company, the family office, and family members. Every single person arrived dressed professionally, except one intern. He walked in wearing a Hawiian shirt and basketball shorts. I looked at my director and he was trying to hold in his laughter as much as I was, but one of the other interns just started cracking up and we all lost it. After all of that ended, we took a short trip to visit a company we had just acquired. Our intern team was directly involved in sourcing this deal, so the experience was quite surreal. Here we were, a bunch of college students wearing suits or Patagonia vests, walking into a warehouse where a few dozen people were working on some large industrial equipment. It's one thing to crunch numbers on Excel, it's another thing to see everything and everyone represented by the numbers.”  

Mr Family Office: Family offices can be a mixed bag. Depending on the family office itself, highly qualified staff can sometimes end up doing fairly low-level tasks. But they can be incredibly rewarding work environments too. With proximity to the family, family office staff can engage on levels that can take years to get to in a corporate environment.

A Career In A Family Office?

“If someone has an opportunity to work at a family office, they have to really consider if they're willing to be there for a long time. You have to really get along with the people you work with and fit into the established culture. I'm starting to think this is one of the hardest jobs to get on Wall Street because it does not seem like there is much employee turnover unless an investment strategy/division either achieves its exact goal and everyone can go home with bonuses, or it catastrophically blows up and everyone is fired. If I decide to stick with a family office, I may need to be in one where there are more investment strategies or more operating companies to grow within the private equity division.”

I could see a future here with family office #1, but I may want something more. There will be a discussion at some point...

If I wanted to stay at family office #2, I would most likely need to switch to another division. Once the M&A campaign concludes for the portfolio company, they just won't need us around.”  

Mr Family Office: You need to consider not only professional growth opportunities but also how well you align with their values and long-term goals. Try to have open conversations about potential career paths within these family offices.

Whatever career path you choose, you should maintain the contacts you have made in the family office world. Those relationships will open doors in ways you can’t anticipate.

Thanks to my guest contributor this week.

If you have advice or comments, drop me a mail and I will pass them on.

It’s fair to say he’s smart, ambitious and proactive… whatever he chooses in life, I’m certain he will smash it.

Family Office Careers

Some useful links for those seeking a career in family offices:

Agreus Group

Simple

Family Office Exchange

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