Mike Boyd interviews successful families and their advisors to learn how they steward their wealth across generations, managing succession issues to "keep it in the family".
Very few family businesses do the work and even fewer make it beyond the third generation.
Follow along to learn about family governance structures, family office investing, succession planning and raising happy, healthy and enterprising children of wealth.
Learn more and subscribe: https://www.businessoffamily.net/
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Tiho Brkan – The Most Interesting Man in the World? Second Passports, Territorial Tax, Mezzanine Finance + MFO Investing
Tiho Brkan is back for a second conversation about family office investing, including a deep dive into real estate mezzanine finance investing, uncorrelated assets for downside protection, citizenship by investment, second passports, territorial tax systems and his global view of markets today.
Tiho is a Global Citizen & Investor, and today runs the multifamily office, The Atlas Investor on behalf of his family and other ultra high net worth families and individuals.
I've been fortunate to build a friendship with Tiho since connecting last year and always enjoy our multi-hour conversations about the state of the world, investment opportunities and challenging eachother to see things from different perspectives. Tiho has a mind like no other person I've met and it's a privelege to listen and learn to him whenever I'm given the opportunity.
To hear Tiho's first appears on the podcast, please visit: Tiho Brkan – Global Deal Flow for Family Office Investors.
"Is Cash going to be King or is cash going to be trash?" - [Tiho]
"While it's easy to make money today and everything seems to be working, the question for very smart investors is to anticipate what's around the corner" - [Tiho]
"If you think about a Real Estate cycle, you have 4 stages; Early-stage, mid-cycle, late-stage, and downturn... in Early-stage, you want to be in equity as much as possible" - [Tiho]
"We don't do deals with any developer that doesn't have more than one exit strategy" - [Tiho]
"If a senior lender is doing 37 million, talk to them, ask them about the due diligence because they're putting far more money than you are and they've done it all" - [Tiho]
"The way that you diversify your portfolio, you can also diversify your life" - [Tiho]
"Stick around very experienced people who have been around for a long time, who have survived the cycles... Stick with a talented group of people who have a low personnel turnover" - [Tiho]
"Negotiate... Negotiate... Negotiate" - [Tiho]
Mike's previous episode with Tiho Brkan is one of the most downloaded episodes, and by popular demand, he had to bring him for a 2nd episode.
Tiho shares that a lot of investors in this period want to make a lot of money as quickly as possible, as this time is not very suitable for long-term investment.
He explains the reasons why this recession has been the worst in a long time, but this does not reflect in some assets and certain locations.
In normal valuation, reprisals happen where you hold cash which gives you optionality and the ability to be selective, but where money supply around the world is increasing at a rapid speed, is cash going to be King or is cash going to be trash?
Tiho explains that as a contrarian investor, you ride a certain wave until valuations become extreme for you, understanding that high valuations today entail future disappointing returns and so rather, you go and look for relative value elsewhere.
Family offices don't have to be restricted to one type of asset, they have an 'Open Mandate' and Tiho describes the various opportunities available for family offices. Most investors are asking, 'how much money can I make by next Monday?' while he is asking 'How do we only lose 20% rather than 50% in the upcoming downturn?'
The capital stack' and 'Mezzanine debt': There are 3 Real Estate strategies which are Core Real Estate, Value add Real Estate or Opportunistic Real Estate. Mezzanine debt is most commonly a strategy seen in opportunistic Real Estate investment. Mezzanine debt exposure is the most versatile in all 4 stages of the Real-estate cycle(early, mid, late, and downturn). With Mezzanine debt, you can get up to 50% returns per annum.
Tiho's due diligence process before investing: First, the deal must be 'shovel ready' meaning construction starts immediately. Next, note the purpose or theme and planning of the
Aaron Chin - My Ceiling is Your Floor - 2nd Gen Leader of Canadian Health Business [The Business of Family]
Aaron Chin is a second-generation business leader and CEO of Organika, a family-led Canadian company dedicated to providing innovative, premium health products to help inspire people to live healthier lives.
Growing up in the business motivated Aaron to build on what his father started 30 years ago. Since assuming leadership of Organika, in partnership with his brother Jordan, they have increased business seven-fold and have grown the company into an award-winning, globally recognized brand, focusing on innovation and a vibrant company culture.
"You start with the mission of the company and that'll help drive your decisions after". - [Aaron]
"If you can tweak one little thing in your process that could save you 30minutes...do it". - [Aaron]
"You are going to determine yourself, how well you do". - [Aaron]
"I really do believe there's nothing like good old hard work". - [Aaron]
"My relationship with my brother is bigger than the business... I think I can pass that down to my kids" - [Aaron]
Aaron's dad had the dream when he moved from Malaysia to Canada to give his kids a chance to get ice cream whenever they wanted.
Following the treatment of his kidney stones using natural products, he started the business with a vision to make healthcare accessible for all.
Despite the rejection, his father persistently put himself and his products out there, till the business took off.
Aaron shares he always had an interest in the family business although his father never tried to impose any expectations to join.
Aaron narrates a simple experience where he noticed the boss employed by his father to manage the business got to the office one morning, and deleted all his office voicemails without listening to any one, inciting Aaron's suspicion of the poor management inherent in the business.
Realizing the diet differences between the newer and older generation, the company pivoted from mostly vitamin pills to be more involved in superfoods, powders, drink mixes.
The surprising eventuality of Aaron becoming CEO in an Asian family where he is the younger brother and always at odds with his older brother, was partly made possible by the family dynamic which started to work out following certain events that strengthened the bond between them.
Aaron shares his vision for the company: I want to see us in every single home in Canada.
Explaining that his dad wasn't overprotective but rather allowed them to make mistakes, and these mistakes helped them learn how to make fast and efficient decisions.
The question: What are you doing about it?
If you teach children what wealth means, it's rather thoughtful to leave wealth for them, but if not then it's just an expectation, and things could go wrong.
To Aaron's kids: Know the importance of Family because it is more important than even the business
[00:49] Meet today's guest "Aaron Chin".
[01:25] Where did the family business begin, and how do you become involved in this story?
[07:40] About Aaron's entry into the business: Was it always an expectation or some other circumstance?
[16:09] Describing the business today.
[19:55] How did the leadership transition come about?
[24:40] Being the younger brother in an Asian family, how did you arrive at the CEO role?
[27:15] What sort of investment process did you go through, and how did you formalize the business?
[33:33] Would you say the company culture remains unchanged or has it morphed as a result of the impact of Private Equity coming in?
[37:45] Aaron shares major lessons learned by trying things and making mistakes at the beginning
[38:50] Is there a multi-generational plan to continue the legacy that your father started?
[41:03] How do you feel about children inheriting wealth?
[42:39] Aaron's letter to his kids.
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Adii Pienaar - First Generation Wealth Creator & Living Life Profitably [The Business of Family]
Adii Pienaar is the founder of three technology companies, two of which he’s exited so far to create first generation wealth for his family. A prolific reader, writer and maker, Adii brings a refreshing perspective to the way he views family, business and wealth.
I was fortunate enough to preview his new book which was released last month, titled Life Profitability. In Life Profitability, Adii provides you with a new perspective for becoming self-aware, recognising your values, and understanding your impact. An enriched life and successful business are not mutually exclusive. In fact, this book will provide you with the first steps in building a business that is more sustainable with increased options for you, your employees, and your family.
"The biggest burden I felt was that transition from wealth generation to wealth maintenance" - [Adii]
"I think in any kind of business partner relationships, as long as everyone is aligned towards the same goal, then everything is hunky-dory, and as soon as someone is not aligned with your process then everything is not hunky-dory" - [Adii]
"Whatever I do, it should be that truest expression of self" - [Adii]
"There are multiple things that pull us into different directions on a daily basis but having an awareness of when that happens... that's Mindfulness" - [Adii]
"I truly believe in transparency for the kids" - [Adii]
"The family office should serve as a leg up for the trustees and that's the kids, right? it's not a handout" - [Adii]
"Neither the family office or any of our individual lives should be so rigid like we're constantly trying to fit into a single recipe" - [Adii]
"The cost of anything we do in life is just Life" - [Adii]
"I don't care if they miss 99% of it, even if they become 1% of the context of this conversation" - [Adii]
"The way I think about legacy is, if I were to die tomorrow, the goal would be to have left my kids or anyone who cares enough breadcrumbs about who I really was" - [Adii]
A major transition point for Adii was moving from wealth generation to wealth maintenance.
With little information on how to run a family office, he was able to get started by asking questions and got propelled into motion when the law firm got the right people around him to explain the process.
Adii describes his value system: How can I wake up every single morning and spend my time manifesting the truest expression and version of myself in anything that I do?
An ideal day for Adii is "being present".
Adii explains that the main reason he went back into entrepreneurship was he wanted to create again, he was enthusiastic about building a team, and those are his higher values for now.
While admitting that his kids have a great life especially from the financial perspective, he is concerned not to bring up spoilt kids who can't be individuals with their purpose.
Adii describes the strategies he uses to help build his kids to become individuals with a backbone: Transparency, which involves letting the kids be fully aware and involved with the ongoings in the family office, as well as the concept of Gratitude.
The family office should always prioritize business ideas from the trustees.
Expounding on the concept of 'Paying a Life Dividend': A business that's not just financially profitable but profits your whole life. Adi discusses the relevance of having assets that mean more than their financial value to the family, which is selected by stress testing, effective communication, and evolution.
It is important to sequence things, rather than doing two things at once and have none getting your full attention.
Every single minute of our day, we only have finite attention, time, and energy to do anything, so the decision to anything is costing us life.
Unfortunately, mainstream media has created a narrow definition of success that serves barel
Mitzi Perdue - Matriarch of the Sheraton Hotels and Perdue Chicken Families [The Business of Family]
Mitzi Perdue is the daughter of one family business titan (her father founded the Sheraton Hotel Chain) and the widow of another, (her late husband was the family business poultry magnate, Frank Perdue), and she is also a businesswoman in her own right. She started the family wine grape business, now one of the larger suppliers of wine grapes in California.
Mitzi likes nothing better than to share insider tips for successful family businesses. Her family of origin (the one that started the Sheraton Hotels) began with the family business, Henderson Estate Company, in 1840, and her Perdue family started in 1920 in the poultry business. These two families have a combined tradition of 276 years of staying together as a family.
"The odds of a family business lasting 100 years are 1 in 1000" - [Mitzi]
"The families who put a lot of effort into designing their cultures are the ones that survive, the ones that let things happen as they may, that rarely supports keeping the family business together over the generations" - [Mitzi]
"70% of family businesses won't make it to the next generation, so if you want your family to last, put a lot of intentionality into letting the family members know from the youngest age that they're part of something bigger than themselves" - [Mitzi]
"The biggest reason families don't last is family quarrels" - [Mitzi]
"So a big piece of advice I'd have for every family is, deal with the problems, get them out, come to a resolution but don't go the press, don't go to adversarial lawyers" - [Mitzi]
"We're measured by what you can give, not what you can get" - [Mitzi]
"I don't think you can be happy if you're not part of something bigger than yourself...
If you want to be happy, think what you can do for somebody else, if you really want to be miserable, think what's owed to you" - [Mitzi]
"In general, your family will be better functioning the more it knows its stories" - [Mitzi]
"If your children turn out right, nothing else matters, if your children turn out wrong, nothing else matters" - [Mitzi]
Mitzi is a part of two multi-generational business families, each of which has lasted for over 100years and over 5 generations.
Mitzi explains that a lot of conscious effort was put into strengthening the families over the years, noting in particular one of the strategies being the "Service to the Family" award.
Every single family that exists has a culture, but is it a culture that came about by accident or by design?
It is critical to be intentional about designing and maintaining family culture as it plays a major role in the success of a family business over generations, rather than just allowing things to happen as they may.
People need a lot of guidance to be steered away from selfishness, and that takes intentionality.
Separating Ownership and Control helps create a perspective of the family as an entity bigger than any one person, and consequently gives a better understanding of the role of stewardship.
Mitzi explains her innovative idea to inculcate the family values in family members, right from childhood.
Noting the importance of knowing how to handle family quarrels, Mitzi strongly emphasizes avoiding the press or lawyers but rather encourages outspokenness within the family.
Three ways that a family can intentionally stay together: Family Newsletters, Family Reunions, and Philanthropy.
Mitzi highlights the positive effects of connecting with both present and past members of the family on the well-being, physically and mentally, of the family.
As a personal preference, Mitzi would rather use books as a means to archive family history compared to other forms of technology, as it may be difficult to access the archive in the future if the technology used to archive it is outdated by that time.
Mitzi recommends entering a new family with humility, observing
Ginny Gilder - Olympic Medalist, G2 Family Office Founder, Social Entrepreneur & Owner of a WNBA Team [The Business of Family]
Ginny Gilder, is an American former competitive rower and Olympic silver medalist. As a second generation entrepreneur, Ginny’s day job is running her family investment office, Gilder Office for Growth but her heart leads her to focus on expanding access to opportunity in the realms of sports and education, especially for youth.
A serial social enterprise entrepreneur, co-owner of the WNBA Seattle Storm, and a writer, Ginny continues to look for ways to expand the footprint of women's professional sports in the U.S.
"The way that people really become good at something and grow wealth is by concentration" - [Ginny]
"There are gifts hidden in tough times" - [Ginny]
"You should keep doing something only as long as you're learning and growing" - [Ginny]
"For any family that's lucky enough to have financial wealth you've got to think about whether you are going to insist that people get along, and at what price" - [Ginny]
"The biggest thing that's probably shifted is recognizing what we really want, which is adult relationships with our adult children" - [Ginny]
"If you want to see change in the world, well, you've got to invest, cos nothing's going to happen if you're not going to invest" - [Ginny]
"What's really most important to most people is Human Connection... and if you really want to be connected, you've got to deal with the stuff that's the toughest" - [Ginny]
After making many mistakes starting a nonprofit, Ginny set up a business that helps start-up nonprofits avoid similar mistakes and achieve their goals.
Early in her career, she had goals that were not related to working in the family business.
Having a financial cushion had benefits, like the freedom to work without being tied to a focus on amassing wealth, although it came with less attention from their father.
When the time came for a transition of the family business, she knew she had to step up to the responsibility placed on her despite her lack of knowledge or passion in the family business.
There has to be a lot of very direct conversations if you want to be in business with your siblings.
Ginny clearly explains that she has no passion for the investment business, but got involved, for the love of family, the financial security, and the business relationships that come with it.
Having an investment office rather than a family office with bells and whistles was geared at equipping her kids to be independent, self-sufficient, and capable human beings.
Honesty has been hugely instrumental in navigating the family dynamics in Ginny's family, she also had to understand the importance of having adult relationships with her adult children.
When things go wrong, that's when you have to figure it out and it's also when you find out the relationships that are solid.
The importance of dealing with difficult family relationships: it's so easy when life is good to think everything is fine but as soon as life gets hard if you haven't dealt with challenges and learned how to disagree and resolve differences, you're not going to make it through the hardest parts of life.
[00:49] Meet Ginny Gilder; sharing her personal and professional background.
[01:34] Her family history and the origin of the family business
[08:20] How Ginny got into the investment business.
[22:50] What was your father's position when you started your nonprofit organization?
[29:00] Ginny describes how the family dynamics affected the transition of the business to her generation.
[30:42] What would you say that you've learned from the separation of roles between family and business?
[33:22] What is the family business structure going forward?
[40:05] How do you differentiate your investment office from a family office?
[41:20] About Gilder Office for Growth
[48:56] How do you navigate through your family dynamics in the world of wealt
Khalid Muhmood - Using the Family Holding Company to invest in Education [The Business of Family]
Khalid Muhmood is from the UK and through the family business holding company Dragonfly Education Group, is an operational investor in education.
He has been active in the business of education since 1994 when he and his wife, Arabella Peters, co-founded Apollo English and then the British University Vietnam. Since then they have invested in a number of businesses all focused on education.
Khalid and Arabella see themselves as the founding generation of their family enterprise and intend to never sell their Dragonfly Education hold co. They’re actively involving their young children in business conversations and laying the foundation for generational wealth, legacy and impact.
"What's your biggest headache?"
"Learning from successful family businesses; so many of them do not load up on debt" - [Khalid]
"The future of education is blended, that means you've got to incorporate online with offline" - [Khalid]
"Sophisticated multi-generational families.. have taken generations to figure out that they need to separate the Governance from the Operations, and that the family needs to be excellent stewards and owners first before they can consider playing an active role in Operations" - [Mike]
"A well-run family business is difficult to beat, especially during downtimes" - [Khalid]
"Why trade anything in, when we've found purpose?" - [Khalid]
"If you’re building any business, I'd say that 'Focus' is the thing that's often lacking, especially if the entrepreneur at the beginning thinks they have to say yes to everything" - [Khalid]
"Look for the good in life... because it really helps you enjoy the journey" - [Khalid]
If you want to be truly in control of your journey in a business, you need to be the owner, not the manager.
At the very beginning, the vision was simply to get the business to survive.
It's only when you move from surviving to thriving that you can ask, "what do you want to do?"
When asked "what is your biggest headache?" at an event, many of the entrepreneurs answered "My father".
If you're not happy with 60000 pounds per year, then any more money might not change anything.
Khalid describes the challenges of Covid-19 as a learning period for the business as a whole.
Finding a way to create balance and incorporate online with offline learning is pivotal, that will be the future for the family business.
Khalid and his wife, Arabella involve their kids as much as possible in the family business even at the early ages of 8 and 10, with some tests to determine their level of interest and perception of the business as a whole.
In the future, the key role for the kids is going to be "Good Owners"
The stewardship role is critical
One of the tips to help foster togetherness among children is that if one of them does something wrong, punish them all.
Other points to note is to never elevate one sibling above the other and to always leave them to sort out their arguments without being the judge.
Khalid shares that the preferred investments taken by DragonFly are those in which a controlling stake can be bought.
A major mistake that was made at some point was accepting an offer from Nokia when it should have been turned down because it was distracting from the core competency of the business.
Khalid shares that his source of knowledge includes mentors, peer to peer learning, and mistakes.
From Khalid to his kids: Look for the good in life because it really helps you enjoy the journey.
[00:49] About Khalid Muhmood and the inspiration for starting the business of education
[06:01] Khalid explains some of the reasons behind the choice of Vietnam as a location for starting the business
[08:59] What was the vision at the time of starting the business
[15:03] The new vision for Dragonfly Education Group
[19:41] How did the business hold up in this period of Covi
Customer ReviewsSee All
Mike is a fantastic interviewer
Mike is a great guy and fantastic interviewer. He does a great job of guiding his guests to get the most out of the conversation for listeners. Plus the guests are top caliber. Highly recommend listening.
Great family business discussions
Love your guest choices, and you do a great job asking pertinent questions that lead to informative discussions, many that are helpful for my family situation. And the production quality is top notch!
Insightful guests and challenging ideas
Mike Boyd puts together a slate of guests with compelling stories about family business and business family. Good stories and challenging lessons from around the globe - not just a US-based story. Interesting look at family businesses and how they do what they do for generations. Thanks for making this available