Early in his investment banking career, while Bill Burgess was working at Goldman Sachs, something unusual happened. One of his most talented colleagues in the financial services group was pulled from the team to quietly work on something internally at the bank.
The secret project? Take Goldman Sachs public.
After the successful IPO and accolades that followed, Burgess’s colleague left the bank to join a family office — something Burgess had never heard of before. He didn’t understand why a star banker at Goldman would do such a thing.
“I thought [he] was making a huge mistake way back then,” Burgess told Modus. “Turns out he was 10 times smarter than everybody and got himself involved in a family office that allowed him to showcase his skills and grow.”
Over the past 20 years, family offices have multiplied to at least several thousand worldwide, and they are better known and understood. But most remain intentionally obscure and difficult to find and engage with. As a result, they are still underserved by investment banks, according to Burgess, now a managing director and the co-head of investment banking in the financial services group at Piper Sandler.
Burgess admits this is true at Piper Sandler. Some members of its sponsor coverage group work with family offices, but the bank aspired to do more, so it hired Matt Somma in November. As a managing director in the financial services group, Somma will primarily advise asset and wealth management firms on mergers and acquisitions, transactions and capital raises. However, he’ll also serve as a point person for family offices, advise them about their portfolios and companies, and help them navigate Piper Sandler.
Somma’s background makes him well-suited for the dual roles. He’s previously worked with family offices at Truist Securities and J.P. Morgan and was a founding partner and the head of business development at Cresset Capital, a multi-family office that has acquired many other wealth managers. Earlier in his career, Somma was also part of a team at MSD Capital, Michael Dell’s family office, that invested $2.5 billion in public and private securities across technology and energy sectors and ran a convertible bond book.
While Piper Sandler is well known for its investment banking and capital markets, it lacks other adjacent Wall Street businesses that could lead family office clients to Somma and his colleagues. There is no private wealth management business, with thousands of rich people who might be one company sale or inheritance away from starting a family office, no huge asset management business handling some family-office investments already, and no commercial bank to generate leads from. But to Somma, this is a net positive.
“If there is a relationship in one part of the bank, it doesn't necessarily always translate into a relationship [with another part],” Somma said.
For example, a family office selling a business might be engaging the dealmakers, but those bankers — and their employer — aren’t always eager to introduce a client to colleagues for fear of souring the relationship. The math behind that is easy: why jeopardize a $15 million or $20 million fee for the sale of a company over a wealth management fee that will likely be a fraction of that? There’s also no guarantee that a family office will lump all their assets with a single institution.
Family offices often want to “separate church and state” and spread assets around to avoid conflicts and get access to different research, deal flow and people. “They have really, really great mousetraps,” Somma said about institutions operating a bunch of different businesses.
“I just wanted to be a deal guy and I wanted to be the trusted advisor who's helping clients with their most valuable portfolio companies in two ways: M&A and capital markets,” Somma said.
Piper Sandler, which is “well-equipped and unafraid” to execute smaller transactions, is as good a partner as any, Burgess said.
Somma is also excited about opportunities he can bring to family offices, including those via Aviditi Advisors, an alternative investment bank for financial sponsors, investment managers, and limited partner investors, which Piper Sandler acquired last year. More often than selling companies they own, family offices have capital to deploy.
“I'm still continually amazed. I get an email every day saying, ‘Have you heard of this family office?’ No, I haven't. ‘Oh, they have $500 million in capital. They want to write $50 million, $75 million checks.’ I'm continually amazed by all the family office formation that's out there,” Somma said.
SCOTUS Rules on the CTA
Thursday afternoon, the Supreme Court said it would allow enforcement of the Corporate Transparency Act while it is being appealed, forcing companies to disclose their beneficial owners.
In case you haven’t been following: In December, a Texas federal court blocked the CTA nationwide and threw family offices and more than 32 million other businesses into compliance limbo. A legal ruckus followed, and everyone (especially FileForms, a startup inspired by the CTA that Modus has previously written about) anxiously waited for the Supreme Court’s answer.
The law’s merit is now up to the Fifth Circuit Court of Appeals, where oral arguments are scheduled for March 25. When exactly FinCEN will require disclosure is unknown. It could be before or after the Fifth Circuit ruling. As of this email, FinCEN’s website has no new guidance. Whenever enforcement happens, those who don’t willfully comply will face steep fines, including a daily fine that was just inflation-adjusted from $500 to $606.
Two Supreme Court justices filed brief opinions about the CTA on Thursday, and one of them contained an interesting nugget.
Justice Ketanji Brown Jackson, who dissented, wrote that she saw “no need for this Court to step in now” because the Fifth Circuit has expedited the Justice Department’s appeal of the nationwide injunction and because everyone had nearly four years to prepare for the law after Congress approved it.
Meanwhile, Justice Neil M. Gorsuch wrote that he not only agreed with the court, he would have gone “a step further” and taken the case “to resolve definitively the question whether a district court may issue universal injunctive relief.”
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Jobs
- Tucked inside Arthrex, a medical device company headquartered in Naples, Florida, that pioneered the field of arthroscopy, is a family office (likely Reinhold Schmieding’s) that is hiring an investment analyst.
- ICBD Holdings, which owns addiction treatment centers, medical billing, mental health resources and more, is looking for an associate attorney to join the newly formed, full-service, in-house family office of founder Christopher Barnett and his family.
- AY7 Management, the Coury’s family office, is looking for a controller.
- Manchester Capital Management, a Santa Barbara-based multifamily office owned by employees and a small group of clients, needs a senior accountant.
- Keel Point, the Washington D.C.-based multifamily office, is hiring an attorney to become their primary legal and tax resource for family-office clients.
- BlackRock is looking for a head of family office for the West Coast to distribute the products and solutions (their words, not mine) to clients worth $100 million or more. Fidelity is hiring a similar professional to work in the Southwest region.
- Joe Dowling, the global head of Blackstone Multi Asset Investing (BXMA), is looking for an executive assistant. BXMA manages $83 billion of assets in various ways, including custom portfolios, special situations, emerging manager seeding and more. Unsurprisingly, the group counts some big family offices as clients. Base salary range is $125,000 to $165,000.
- Marc Porter, chairman of Christie's America, is looking for an executive assistant, potentially another interesting job — and it better be for $65,000 per year (a salary below the bottom percentile for executive assistants in NYC).
- Or, forget all that and apply to work at Walmart, which just bumped regional store manager pay to over $600,000.
Let's get together. I'll be in...
- New York.
- Edmonton.
- Miami for Future Proof Citywide (where I’m moderating a panel).
- Palm Springs.
Housekeeping
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