RECAP: 2018 FOX Fall Enterprise Forum

Lessons Learned from Seasoned Direct Investor

Panelists:
Keith Harbison, Founder and Managing Partner, Alitus Partners, LLC
Stephen Hohenrieder, CEO and CIO, Meyer Family Enterprises
H. Scott Silverman, CEO, Agman

Moderator:
Kristi Kuechler, Managing Director, Investor Market, Family Office Exchange

Session Description: 

Direct Investing is a key investment focus for a growing number of families as they seek greater control of investments and wish to encourage entrepreneurship within the family. A panel of experienced direct investors shared real-life examples of how they sourced and vetted opportunities. They shared lessons learned and best practices to help attendees develop their own family’s private equity strategy.


"Look at the applicability of your past investment and business experiences before looking forwards and making a direct investment."
Key Takeaways: 
  • There are four common lessons learned from experience in direct private investments: 
  1. Patience: Families should take advantage of the longer time horizon direct investments provide compared to funds 
  2. Expertise: Focus in an intentional way on sectors that are well understood and in the comfort zone of the investor 
  3. Alignment: When entering a transaction, the alignment of the stakeholders (buyer and seller and others) must be evaluated 
  4. Due Diligence: It is important to look in an intentional manner at lots of deals and remember diligence is a sunk cost and dollars 
  • This experience also revealed several common failures, including the “failure to trust your gut”, investing with people that lack integrity or do not bring a requisite skill set to the deal, and overconfidence of the investor. On the other hand, concentrating on “secondary and tertiary markets”, being flexible when obstacles are raised, and gaining a real meeting of the mind between the buyer and the seller of the business have been successful strategies. 
     

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(FOX Members only)