E214: Inside Look into a $14B Multi-Family Office

You have 14 billion AUA assets under advisement.

Talk to me about how pooling your capital that kind of midway between 10 and 20 billion dollars positions you in the market to invest into private capital.

In what way is that an advantage, and which way is it a disadvantage?

We do pool capital across all asset classes to get access to all kinds of opportunities.

In cases, we're using that

capital to negotiate better economics, reduced fees, improved preferred returns, reduced carry, etc.

Taking a step back, why would a wealthy family invest in private markets?

What's the rationale there?

Welcome to the How to Invest podcast, where we explore how top institutional investors make their very best investment decisions.

I'm your host, David Weisberg.

Today, I'm speaking with Greg Brown, co-founder and co-CEO at Caprock, which oversees over $14 billion in assets under advisement.

We dig into their endowment-style approach for wealthy investors, navigating the practical limitations high-net worth families face, and the significant tax alpha available for investors in the private market.

Without further ado, here's my conversation with Greg.

So, Greg, you're the co-CEO of Caprock.

What is CapRock and what problem are you solving?

Caprock is a multifamily office that we have built to serve

ultra-high net worth families with a focus on world-class access to private markets.

And we do that tax-efficiently.

We do it on a completely bespoke basis for each client.

And we do it for most of them in a values-aligned way.

We think of ourselves really playing two roles.

We're the family chief financial officer and chief investment officer.

Each of those involves a number of functional activities, but we think of our clients as the CEO.

And in most cases, that's multi-generational in scope and scale and duration.

We have incredible access on the private investment side, but we are not a product shop.

We're a family office for an elite group of clients.

Our job is really to help families

navigate the complexity that comes along with having a large balance sheet.

preserve wealth across generations and invest in ways that reflect their priorities.

We currently serve just over 400 families from 11 offices around the United States and manage a bit over 14 billion of assets.

And you say CIO and CFO.

So CIO is asset allocation, access and CFO is kind of K-1s, planning, and almost like one is lagging and one is leading.

Yeah, and I would put the CFO hat on first.

It's really understanding the entirety of the balance sheet,

understanding the things that we don't control first.

And that includes privately,

closely held operating companies, real estate portfolios, personal spending.

It's really sort of forecasting future liquidity management in both directions.

And then understanding the objectives of each of the entities in the estate plan.

And so that when we eventually put the CIO hat, we're doing it in the full context of all of the things that may need capital in the future.

And that includes a lot of things we didn't choose and may not even like some of them, but it's important to wrap our arms and and understanding around them so that

those future obligations, particularly to the things that are not liquid,

are done with a margin for error that

makes it very sustainable long term.

And is this forecasting cash management?

Is that something that you sit down with your clients on a weekly, monthly, quarterly basis and kind of technique behind the scenes there?

We spend a lot of time upfront with families understanding their liquidity liquidity needs, their intent for short and long term, charitable planning, intra-family gifting,

and just really understanding the intent of each entity.

And then

all of the things on the balance sheet that would potentially consume cash.

And many of our clients are entrepreneurs.

Many of them have been through exits.

Many of them are running

their second, third, fourth company.

And some of those companies consume capital, some of those companies throw off capital.

But really understanding that engine in advance gives us kind of a starting point, and then we refine that over time as new information comes to us.

I think for most families,

when we try to uncover things like burn rate, initial estimates that clients have in mind for what that is tend to be off by a wide margin.

And part of this process of refining what actual spending is

helps all of us do that with much more precision.

Having to look at their kids' credit cards and

their spending.

Yeah, exactly.

And from a practical standpoint, charitable giving, spending, money, shopping, spending on capital calls, private equity, these are all just liabilities on the balance sheet.

And they all basically are one number or summed into one number at the end of the day.

Yeah, that's right.

And on a, I I mean, we have the benefit as a family office of looking at the entirety of the balance sheet.

We're looking at all of those cash flows and expected cash flows

on a blended basis.

That gives us much more comfort over time to take on some illiquidity.

Whereas firms that I think approach investing from more of an asset management perspective where they are kind of doing a cookie cutter model,

they're at a disadvantage because they don't have as much visibility into what else is going on on the balance sheet.

And because we do so much of that upfront discovery work,

we are able to invest more like an endowment and we have great comfort taking on long-term illiquidity elsewhere on the balance sheet when we already understand all of the things that are going to need liquidity

near and long term that we've solved for with a margin for error.

One of the biggest trends in finance, perhaps the biggest trend, is this shift towards privates for high net worth, ultra high net worth family offices, essentially sub-billion dollar pools of capital.

Today, twenty twenty five, at which net worth is it practical for a high net worth investor to start having alternatives or significant alternatives exposure in their portfolio?

Yeah, great question.

Generally, once a family exceeds at least 10 million of investable assets, they can begin to access

some of the benefits of endowment-style investing.

And that potentially includes meaningful allocations to private equity, venture capital, private credit, private real estate.

Our average client is much larger than 10 million.

But doing what we do is possible at that scale.

Because of legal requirements and practical limitations,

it gets much more difficult when you get smaller than that.

Because of some of the work we do to make

opportunities more accessible,

we can still do

a good job

at that level.

I previously had the CEO of the Walton family, the CEO of Cascade, Bill Gates family offices.

He said, one of the things family offices should focus on is making sure that they manage their money and their money doesn't manage them.

or basically that their money serves them and that they don't serve their money.

Are there certain light versions of capital allocation or operational complexity that somebody with $10 million might want to pursue versus somebody that has a whole staff to do the work for them?

And just talk me through that.

Yeah, I mean,

doing

private investing, number one, is very hard to do it well.

It's easy to deploy capital in private markets.

It's hard to do it well with

top quartile managers for many reasons.

Having access to great funds is difficult because most great funds that have sort of long-standing

high-quality risk-adjusted returns have a lot of other investors who also appreciate that and have been at the table

as recurring investors throughout many vintages.

Many of the great platforms that have been around for decades just are very difficult to get into.

And then for smaller investors, it can be really difficult to meet the minimums and build out a diversified portfolio when the check sizes and commitments are substantially larger than what would make for a comfortable commitment at that level.

And then to your point on the administrative overhead and having sort of the administrative complexity tail wag the dog of the client and their sort of overall objectives.

There is a lot of complexity in handling when you have

dozens of fund commitments or co-investments, handling all of the tax documents,

making capital calls, managing liquidity to forecast those things on a blended basis over time.

There's a lot of complexity there.

And I think all of our clients appreciate what we do as a family office to make that look less less difficult than it is.

So where does the service that you do for your family offices start and stop on behalf of your clients in terms of this complexity, cash flow management?

And talk to me about

how much you go about obfuscating this operational complexity.

For every client,

we track every cash flow across every entity

and serve it to them every month.

So we're tracking every capital call, every distribution, characterizing it

from a tax perspective and a return perspective, so that we have

ongoing returns across the portfolio and have

very tight control and

reporting on cash flow movements in both directions.

So there's a lot that goes on from a reporting perspective.

From,

you know, I describe some of the activities that we perform as a CFO.

A lot of those are kind of building blocks to help us understand and give us context around what each entity on the balance sheet is trying to accomplish.

But as a CIO, it's really about

sort of starting with a macroeconomic view of the world and the opportunity set and the risks of that environment, which clearly is a

changing, it's a moving goalpost, if you will.

But once we have that view and

are prepared to deploy capital, we spend a lot of time putting opportunities in the toolbox, you know, across all asset classes and then let our advisory teams who have the best understanding of what each client is trying to accomplish

make those tools available to those teams.

And then the teams make recommendations to clients for

sort of the right pieces of the puzzle to accomplish the needs of each of those entities.

So it's really

those two roles, there's a lot behind those.

And within our firm, there are many sort of functional teams that are playing a role there.

But it's really about

kind of managing the balance sheet, managing those future obligations, and then building an elite

group of opportunities to fit our macroeconomic view.

What we don't do

is a lot of the more concierge services.

So we're not walking our clients' pets,

we're not fueling the jets, but we might help them

buy the homes

or buy the plane or the boat

or finance it.

So things that have sort of an impact on the balance sheet, we're involved in.

Things that have more of a personal impact

on a day-to-day basis, we're probably less involved in.

But as a family office, we're not trying to do what we do for everyone.

We're trying to do a lot for a small number of families versus the inverse, which I think is more akin to what most of our peers in the industry do.

At the time of this recording, you have 14 billion AUA assets under advisement.

Talk to me about how pooling your capital and that kind of

midway between $10 and $20 billion

positions you in the market to invest into private capital.

In what way is that an advantage?

And which way is it a disadvantage?

Yes,

we do pool capital across all asset classes

to

get access to all kinds of opportunities.

In some cases, we're using that breadth of capital to negotiate better economics, reduced fees,

improved preferred returns, reduced carry, et cetera.

Many of the co-investments that we do are direct to balance sheets, particularly for companies where we can be helpful

to those portfolio companies of GPs that we know well.

But there are many scenarios where having pooled capital in pooled vehicles also makes sense, and we do a fair amount of that.

There are opportunities where there are limited slots in funds or limited slots in co-investments.

We have

pooled vehicles.

We've done seven vintages of pooled vehicles in private markets that are all fee-free and carry-free to our clients.

And

that alone is exceedingly rare for firms in our industry.

In those vehicles, we do LP commitments to things that are very difficult to get into.

And then we also do co-investments in many, many great companies

over the years.

We've been in SpaceX multiple times going back over a decade.

We're in companies like Andreal and Seronic and we were in Palantir when it was private, Adipar, Anthropic,

and many others.

But

all of those for our clients are

as direct as you can get and with no economics to us.

So

they're special opportunities and these days, private markets are

a pretty important place to be.

I was speaking to the CIO of Fordham University earlier today.

We were discussing interval funds, and one of the things that she mentioned was that they kind of are poor fit for liquidity because just the time that you need the liquidity, you know, everyone's rushing for the gates and they can't get that much liquidity.

And then they're also poor for the illiquid bucket because there's some cash drag there as well, because you basically have to invest in some liquid parts of the portfolio in order to to.

What are your views on interval funds specifically for taxable investors?

Interval funds are

a sensible part of the kind of broader democratization of private markets,

and particularly for firms, advisory firms that have smaller clients

or maybe not sufficient scale, or the clients

aren't big enough, or their investment teams are not sophisticated enough to develop direct access to top opportunities in private markets.

It's really hard to develop that access.

It's taken, we've been doing this 20 years and probably spent the great majority of that time cultivating the access that we have today.

So

I think they have a place, but for

I think it's for exceptional opportunities where they're producing sufficient liquidity to match the redemption liquidity requirements of the fund structure.

I think when you have a redemption timeline mismatch is when you kind of run into problems and more than likely, to her point, you probably run into gating

and

not as much liquidity as you thought was there in the first place.

We use interval funds, I would say, very sparingly.

There are a couple of situations where where they work well.

But for the most part, our private markets access

is

illiquid.

We know it's illiquid.

Our clients know it's illiquid.

And we have solved for the liquidity on their balance sheets elsewhere in advance, which allows us to not sort of wrap illiquid assets in semi-liquid vehicles, which,

to your point,

is where problems arise.

So, what's the best practice today, Q3 2025, when it comes to cash flow management for family offices?

So,

you commit $10 million into a private equity fund.

You know it's going to be drawn over the next three to five years.

What practical

toolkit do you have to manage the liquidity?

Good question and difficult problem.

I think when you're making a single commitment

to a fund, you have

a difficult time predicting when exactly the capital calls will be made.

Most funds do not do that

on a very predictable schedule.

But when you have

dozens or hundreds of funds where collectively you can manage the liquidity,

kind of the combined liquidity forecast of those as a group, it can start to get

much more predictable.

And so the way we think about that is to kind of break commitments down into short-term needs, say the next six months or so, where we'll keep forecasted liquidity that

should be needed needed to cover things like personal burn rates and any known upcoming expenses in the short term, plus those capital calls that are in the next

six months or so.

Keep those in very liquid, short-duration treasuries or money markets or something that's quickly available.

And then things that are a little bit longer term,

call it six months to 18 months or so, we can put in something that's a little longer duration

that may be semi-liquid credit fund or commitments that we'd previously made to semi-liquid credit where we can redeem them

over that timeline to in advance of those upcoming capital calls.

And then, for the capital calls that are quite a bit further out, two plus years out, we can deploy those into

longer duration.

What we try not to do is have

more equity exposure than necessary to those assets.

What we don't want to be doing is redeeming or selling assets at the wrong time in the event that the markets

get crossed.

We don't want to be raising liquidity from the wrong assets at the wrong time.

So we try to make sure we keep those extra liquid, have some margin for error, and have several buckets we can get liquidity from if there is more of an

unexpected raise required.

Double-click on the issues that arise from getting liquidity from, quote-unquote, the wrong assets on the the wrong time.

Is it some tax drag?

Is it just that you're selling that the absolute wrong time?

Or

tell me more about that.

Well, I mean, if you look historically at times when equity markets have had a you know sort of a quick drawdown and if we had been

expecting to be able to get you know capital from equity markets for capital calls in you know April or May of 2020

because those were quote unquote liquid buckets, but they're equities and they obviously got beat up tremendously in a short period of time.

If we were having to sell assets and move out of those equity positions at that point, we would have been selling at the bottom.

And

it's never a recipe for maximizing value.

So we try to make sure because we're making

at the moment, 14 billion of capital, almost 7 billion of that is deployed into things that are not stocks and bonds.

So we have a tremendous, on a blended basis across our client base, we have a tremendous amount of non-liquid commitment capital.

And so it's important to

make sure we understand the calculus for those capital calls and the sources that will fund those

future capital obligations.

So

you just don't want to be in a position where you're selling at the same time everyone else in the market is selling.

We want to be opportunistic buyers when there's a drawdown in public markets or in other asset classes, you know, not a seller.

One of the dirty little secrets of Funafunds is that they love to overcommit to venture funds because they get some distributions back.

Is there ever a reason to overcommit in your equity bucket, knowing that you would have to sell some of your public bucket in order to make up in these couple standard deviation liquidity crunches?

Yeah, I think most

CIOs that do endowment style investing would say it's logical to overcommit somewhat

over time, knowing that you're going to be feathering in multiple vintages and that most of these funds take three plus years to deploy.

But it really depends on, I think you have to get a bit more granular and look at the underlying history of each GP platform, each fund platform.

what has been their timeline, what is their expectation, what has been their expectation or track record of returning capital?

And

that's an area where you need to be really careful because there have historically been periods where DPI is limited.

And we're kind of at the tail end of one of those right now, where there are plenty of new venture and private equity funds and real estate funds created in 2020 and 2021, but not nearly as much capital, even though there's a lot of value being created in many of those fund platforms, not as much value has been returned to LPs.

So, if you over-committed

too much, you may have gotten over your skis and created a problem.

Said another way, when there's not a lot of DPI in many markets, it's highly correlated.

So, you might think you have commitment private credit or private equity, but if there's just no DPI, it could be correlated even across asset classes.

That's right.

And it seems like the only solution that people talk about really is secondaries selling.

And of course, it could be painful to sell at a 10, 15, 20% discount.

You talked about selling out of your public book, which is also painful.

Are there practical lending tools that are available to high net worth investors?

Double-click a little bit on other tools that are available to solve this problem.

For us, if we are sellers in the secondary markets, it's likely because there was a meaningful, unexpected material capital need that wasn't forecast.

We love the secondary market.

It provides all kinds of liquidity for early employees, early investors, founders,

certainly in the venture market, but also even for tail interests in LP commitments and private equity.

But I would say more often than not, we are a buyer because of the discounts you referenced.

Probably

19 out of 20 times we're engaged in secondaries, it's because we're buying something, not selling.

If we're selling, it's probably because there was a large unforecasted capital need that we didn't see coming,

which wearing the CFO hat, that would be a mistake

that we would be sort of navigating around.

not necessarily hours, but sometimes things come up in terms of demand for capital, and we have to navigate those, but it is a great tool.

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And unlike endowments and pension funds and foundations, you have to deal with a taxable aspect of your investor base and your client base.

Tell me about how that differs your asset allocation strategy and also what tools do you use in order to make decisions on a post-tax basis?

Yes, a great majority of our clients are

taxable investors,

except for some of their entities like IRAs, 401ks, and family foundations, which there are many.

But we use many approaches to navigate tax.

Every investment that we look at, we're looking at the net of tax effect and making sure that we're putting it in the right entity,

the right time, the right place.

For example, if someone has

meaningful income that's easily covering

their personal expenses, we're not going to create a lot of ordinary income

taxable gains elsewhere in the portfolio.

But

for someone who is a senior executive and

retires and suddenly no longer has that income, then we may layer in a radically different approach to yield creation.

But we use many, many tools to navigate the tax picture.

For

early stage investing, We do a lot of

seed and up through series A investments in venture capital that create QSBS, qualified small business stock gains

that

create a lot of headroom for

tax-free growth.

We use qualified opportunity zone investments in real estate to defer taxes and then grow tax-free

over the last several years.

And there's been

a new version of that that just

passed legislation.

We use tax alpha long-short equity strategies through firms like Quantino and AQR,

130.30, and many flavors of that to accomplish different things that generate material tax alpha.

We use a lot of estate planning vehicles, Spouse Lifetime Access Trust, GRATS, CLATS, CRTs, do generational gifting along the way, private placement, life insurance, donor advice funds, and foundations.

I mean, there are obviously many tools, but we're using them all.

You mentioned tax loss harvesting.

It's probably the hottest tool right now in

tax planning on the high net worth side.

Tell me about that.

And also, you mentioned the 130.30, but there's bigger, there's 300, 200.

Tell me about these strategies, A, when you use them, and also when could they go awry?

Quantino, AQR, and others have these strategies that,

and they work in many scenarios.

So there are kind of different flavors of them, but the sort of first and probably largest one of those is called the 130.30.

And

think of the 100 part of the 130 as being a core portfolio.

And

the 30 up and 30 down is

where we borrow against the base position

to add 30%

levered access to the loans that the manager likes.

And then we simultaneously short 30%

and get a short interest rebate from the custodian that covers the cost almost entirely of the margin.

So that the net effect of that is you're getting the core underlying exposure you would have had to begin with, whether that's in an SP 500 portfolio or it's in concentrated assets that you don't even want to sell.

You can do that as well.

They call it an overlay portfolio.

And then in

a market where good things go up, you lose on the shorts.

And in a market where

things go down, you make money on the shorts, but lose on the 30% long, you're always in a position where you're able to harvest losses in a good market or a bad market.

And in a normal tax loss harvesting separate account,

you would see somewhere between 50 and 100 basis points of tax alpha created.

In this 130.30 strategy, it's about three times that.

And to your point, it doesn't have to be limited to 30% leverage.

You can do 45.45 with no change in documentation, and you can go substantially higher than that, which some people use with, compare that with fixed income, you can go 225 in both directions.

The more leverage you use, the more you probably will want really stable assets as the sort of core exposure.

Otherwise, to your question of what can go wrong,

capital, you can get a margin call and

have to unwind.

the strategy.

But it's a powerful,

you asked

why would someone use that?

It's a powerful way to generate tax losses to offset other gains that we're seeing elsewhere in the portfolio.

So if someone has a concentrated low basis position,

maybe they took their company public

or

received

public company interest from some other company that they sold to that public company.

If you have a low basis position and you're expecting to harvest material gains or you just did harvest material gains, these losses can be used to offset those gains.

And

it's become popular, I would say, very quickly.

Yeah.

So

taking a step back, why would a wealthy family invest in private markets?

What's the rationale there?

Well, private markets drive large portions of the economy.

In fact, 87% of all companies in the United States with more than 100 million of revenue are private.

The average new public company in the year 2000 was four and a half years old, and there were many of them on a regular basis becoming public.

The average new public company now is over 12 years old.

And a lot of that has been enabled by the secondary market we talked about earlier.

But companies like SpaceX and Anderal and OpenAI and Anthropic and Stripe are worth 50 billion to hundreds of billions of dollars.

And if you're waiting for those companies to become public, you're missing out on critical years of massive growth.

And as an example, Anthropic over the last four years went from five years ago, it didn't exist, but over the last four years, it went from 10 million of revenue to 100 million of revenue to a billion last year and is projecting, this is public information, but it's projecting

10 plus billion in revenue this year.

That's 1,000% annual growth

year over year for years, you know,

for four years in a row.

And the average of the SP 500 last year was just over 5%.

There's a lot of other data around this, but private markets is just a really important place to be invested for those who can.

And with the democratization of private markets, making that more accessible,

some of that via new legislation,

I think that's important to make it available to more people.

But for now, the ultra-high net worth crowd,

if they have the right advice, they can get access to a lot of the most interesting companies in the world.

I had the CIO of Hurdle Callahan, Brad Conger.

One of the things that he's really analyzed is how much small cap value has changed in the public markets.

So obviously, there was this value versus growth kind of lost decade, and then it's bounced back a little bit.

But fundamentally, what value companies in the public markets today?

Fundamentally, the companies are different.

So he argues that there's a lot of adverse selections, that only the companies that have to go public at the smaller end are now small, small cap value.

And then also, a lot of those smaller cap companies are actually fallen large cap companies.

So they're just like poorly managed large cap companies.

Whereas before, you had companies go public earlier.

Now they're actually private companies.

So to be truly diversified today, you do need access to the private markets.

You can't really be diversified just through the public markets.

Exactly.

That's a good observation.

Public markets are very different than they were 20 years ago.

And there

just aren't as many of them.

There's not as much sort of velocity of new issue

coming to the market.

And

it's unfortunate for retail investors, for smaller investors, but for ultra-high net worth investors,

you sort of have a captive market with relatively exclusive access.

But a lot of that has been created by the regulatory environment that makes it very costly to be a public company.

And so

if you have secondary markets as a founder or early employee or early investor to kind of take the pressure off of boards of private companies to become public, then the runway for them to remain public just can be in place for a lot longer.

Do you worry that the democratization of the private markets, more people having access to that, is going to drive down the returns?

In other words, it's just supply and demand, more demand chasing finite supply will drive down returns.

I think that the pie is growing fast enough that that's less of an issue.

And I think the sort of social dynamics of giving more people access to those markets are probably more important than the returns of the top 0.01%,

which I say selflessly, given that that is my client base.

I think also net new companies should be funded, startups.

And you could argue maybe the risk return isn't even there for investors.

But if they are funded, they're going to be now Series A company, Series B company, so the pie could grow.

What about in terms of private credit?

It's arguably the hottest asset class over the last several years.

Are you concerned that it's overheating today and that there's too much money chasing too few opportunities?

Again, that's another market where the pie is growing quickly.

And

20 years ago, a lot of private credit deals were happening with banks.

And because, again, because of the regulatory environment making it more and more difficult for banks to lend

and

threading the needle on their tier one capital requirements.

That market has been

pushed to private credit lenders.

We think private credit

can offer very attractive risk-adjusted returns

and often with lower volatility than public markets.

For taxable investors,

it's tricky to navigate, and

we

sometimes use tax advantage wrappers to use

private credit where we would do less of that for our taxable investment accounts.

But

still,

there are a lot of interesting platforms that do a tremendous job at scale, firms like Cliff Water that

have grown, to your point, quickly

alongside many others, but

drive great risk-adjusted returns and

have giant pools of borrowers and are able to navigate the liquidity that they're offering to their LPs.

And just to double-click on that, you're using private credit, which to a lot of people is attractive, but essentially short-term income could be up to 50%.

You're putting in them to non-taxable

entities like PPLI or private placement life insurance.

Tell me about about that.

I've heard conflicting things on PPLI.

Some people say that it's very complicated.

Some people say it's just a 1099 every year.

How complex of a structure is that?

And at which asset size does it become practical to pay for a vehicle like that?

The accessibility of PPLI has changed rather dramatically in the last few years.

It used to be a tool for only very ultra high net worth families and the typical PPLI

commitments that were being made were many, many tens of millions.

And those are still happening, but I think that has

the infrastructure and the platforms that offer that

have

made it a very effective tool at much smaller levels.

single digit millions, which is still a lot, but

they've kind of perfected that.

And you can put many kinds of investments in

PPLI,

cash, stocks, bonds, private investments, and they grow without being taxed and you can take them out later

if you do it in a tax efficient way, or you can get the capital out later in a tax-efficient way and borrow against it along the way.

So it's a great tool.

I would say it's not completely gone mainstream, but it likely will unless there's a legislation change.

But that's been forecast for a long time and hasn't happened to date.

If you could go back 19 years ago when you co-founded CapRock, what is one piece of advice that you wish you knew that would have either accelerated your career or helped you avoid costly mistakes?

When we set out to build this nearly two decades ago, our aspirations for what was possible were kind of based on where the world world had come from.

And we spent,

for the first five years or so, we spent most of our time talking about what is a family office,

evangelizing the category, talking about

why should I

pursue private markets at all?

What does it mean to have an aligned approach to family office investing?

How do you contrast that with a bank or a broker?

There was all this sort of field building that was required in order to tell the story.

And

certainly, most people at that point didn't know who Caprock was.

Fast forward today,

in the ultra-high net worth space,

most families understand what alignment means and why it's important.

Almost everyone these days understands that private markets are a key part of the total capital market scene, especially amongst the most innovative companies, and that great risk-adjusted returns are

possible in things like private equity, and private real estate, and private credit.

And

they understand

some differentiation between the brokerage platforms and independent firms in terms of alignment.

And in most cases, when we meet with someone,

they know who Caprock is.

And so

that makes the whole thing dramatically easier to scale when you don't have to spend all of your time evangelizing the category and can really talk about

what we can do for a family more directly.

I think

if I were to go back and replay

some of what we did and do it differently, I think I would do it faster and

be more bold in terms of the internal investments that we made to scale more quickly.

For 16 years, in our case,

every investment in infrastructure and team and office and the entire platform was a personal capital call.

And I think that made us

reticent to make too many investments at the same time.

And

these days, it's much more obvious

what the opportunity is, and we've been able to achieve sufficient scale that we also understand that when we get more scale, to a degree,

we get better.

The opportunity set improves, the infrastructure improves.

And so, there's a sweet spot where

scale

makes you better,

but above a certain point, scale tends to,

you know, I noticed with some of our our peers, with too much scale, then the whole thing can become productized or

mechanized such that you lose the personal touch.

But I think we've done a good job of managing

the balance of, you know, do a lot for a small number of families and understand that we're not trying to do this for everyone.

Speaking of scale,

a lot of multifamily offices, they used to offer these kind of venture co-invests, like you mentioned, Saronic, Anthropic, SpaceX, and then they stopped doing it because they found that even if somebody gets a 10X in one vehicle, a 0x in the other vehicle, it was destructive to kind of the relationship with the client.

How have you been able to scale that?

What's your philosophy around that?

We've made many, many of those investments.

We do them a couple of ways.

We do them in pooled vehicles that I mentioned earlier are fee-free and carry-free.

Those are really parts of a portfolio.

And so if you have an outsized positive outcome or negative outcome, it's still part of a portfolio.

But we also do for kind of high-conviction opportunities where we

think there's a substantial upside opportunity and a very low probability of a negative outcome.

And if there are sufficient slots available and there's sufficient capital available, in addition to doing those co-investments through the both vehicles, we will do them direct with clients.

I think many clients appreciate being part of those things, and especially with a platform that is not wrapping them in extra economics and to be able to deliver things like SpaceX or Anthropic or some of those other names you just mentioned

direct to clients and, in many cases, direct to the cap table of those companies or in

very efficient SPVs alongside world-class general partners of top quartile or better venture funds and private equity funds.

That's a pretty special opportunity.

And

many of those businesses have become

have become category winners

and our clients have been able to watch and be part of that journey long before the average investor

is at the table in public markets.

Well, Greg, this has been an incredible deep dive on high net worths and family offices.

I appreciate you taking the time and look forward to continuing the conversation live.

Thank you.

I appreciate it.

Thanks for having me and enjoyed the conversation.

Thanks for listening to my conversation.

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