The Business of Family

Jeff Gould is the founder Lineage Asset Advisors (LAA) a full-service commercial real estate advisory and consulting firm providing customized commercial real estate services to help families make seamless transitions with their properties – from one generation to the next.
Lineage collaborates with estate planning advisers to develop and implement portfolio solutions that meet the goals of multiple generations. Their aim is to preserve and enhance family wealth and legacy during difficult life transitions while establishing a culture of respect, peace of mind and financial sustainability.

Standout Quotes:

• "Like most forms of financial planning, the sooner you plan ahead, the much easier it is to implement and follow through" - [Mike Boyd]
• "Even if the family is risk-averse, I think it is really critical for them to understand that the risk of doing nothing may still be higher than the risk of doing something if they plan to keep the assets" – [Jeff Gould]
• "I think many families need to stay nimble in the future and really adjust for change" – [Jeff Gould]
• "Wealth and wealth transfer doesn't always lead to happiness, in fact in many cases it leads to conflict and challenges and strife among family members, so we want to try to shift that conversation, and that takes effort and planning" – [Jeff Gould]
• "Life is generally empty and meaningless, and we have the ability to establish positive and productive meaning in the midst of a world in constant transition" – [Jeff Gould]

Key Takeaways:

• The ideal scenario would be to involve Jeff early in planning for the transition but the reality is that he is engaged much later when things need to move quickly.
• There is a unique skill set that is needed to be a trusted adviser to help the family understand what they have in regards to Real Estate, and develop a plan with that Real Estate called a "Shared Asset Ownership plan" that considers the variables of the next generation.
• The 3 phased process includes Discovery, Planning, and Implementation.
• Addressing the issue of Deferred Maintenance; the 'Do Nothing Scenario' and the 'Do Something Scenario'
• 5 Transition Strategies in Real Estate planning: Communication and Education, Conflict Resolution and Accepting differences, Rediscovering your commercial Real Estate portfolio, Developing a mindful asset transition plan, and Implementing the plan and adjusting for change
• Jeff's advice to Real estate entrepreneurs: Creating your estate plan and developing a shared asset ownership plan that aligns with the next generation.
• Jeff explains that he helps the family understand that it is a fortunate situation to be carrying on and stewarding the transition of the assets rather than focusing on the personal value of the asset to each family member.
• Be respectful to everyone you encounter.

Episode Timeline:

• [00:49] Jeff Gould and his professional background
• [06:06] Do you usually get called in at the time of a transition event in a family or ahead of that time to plan a healthy transition?
• [08:37] Jeff gives a general picture of the different categories of clients he works with.
• [11:12] What are the particular challenges with the real estate space that create the need for Jeff's specialty, to steward assets in family transition rather than a generic accountant or financial planner?
• [16:51] Jeff describes the 3 phased process of his work with families
• [24:00] Addressing Deferred Maintenance
• [30:50] What would you say is the appetite for innovation in Real Estate?
• [35:06] 5 transition strategies in Real Estate planning
• [39:44] What advice would you give to a founding generation or Real Estate entrepreneur to best prepare themselves to have a great plan in place?
• [43:24] Do you work with any families that are multigenerational into the 3rd, 4th, or 5th generations?
• [49:38] From Jeff to his kids

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Special Guest: Jeff Gould.

Spon...

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 each other to see things from different perspectives. Tiho has a mind like no other person I've met and it's a privilege to listen and learn to him whenever I'm given the opportunity.

To hear Tiho's first appearance on the podcast, please visit: Tiho Brkan – Global Deal Flow for Family Office Investors.

Standout Quotes:

• "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]

Key Takeaways:

• 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 15% 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 project, location of the project, the track record of the borrower, feasibility studies, the general contractor or quantity surveyor, Securities, and the Exit Strategy.
• What is the Monitoring process? This involves Weekly and fortnightly communication to get updates on the project. it may also involve site visits by you or a Real Estate expert, and construction status updates.
• Discussing Residence Planning perspective: What is the purpose that we're trying to accomplish here?
• The OECD tax model: This is divided into 4 segments of how income is taxed. First is the "No Income Tax", second is "Territorial Tax". "Residence-based Taxation" is third. Last ...

Matina Agio is a personal inheritance consultant. Her work inspires a deeper perspective into inheritance - beyond the legal and financial. She provides niche counselling, facilitating her clients- often in midlife, to resolve inheritance-related dilemmas, manage their possessions and create a meaningful legacy.

Through her signature method - THE INHERITANCE MUSE METHODTM, she addresses both the tangible and intangible aspects of their inheritance, heritage & wealth. Matina’s clients include art collectors, historic home owners, affluent individuals and family office members around the world. Matina’s experience of living & working in England, France, Germany, Italy, US, Canada and Greece, allows her to address their varying backgrounds.

Standout Quotes:

• "For me, the main wealth of our inheritance lies in the intangible inheritance because it is that which is not vulnerable, and it is that which probably the most influential" - [Matina]
• "A bad experience may turn out to be a very wealthy experience, it depends on how we process that...sometimes we receive good gifts in bad packages" - [Matina]
• "Objects are storytellers, they contain memory" - [Matina]
• "We just give our kids things, but we should give them stories with our things" - [Matina]
• "The value of something to us is always what our experience of it is" - [Matina]
• "Our ownership is a symphony of things put together, and we as good conductors have to master that symphony... so we can have harmonious wealth" - [Matina]
• "It's not what happens to you but what you do with what happens to you" - [Matina]
• "There are people who own a lot of things and experience very little value and then there are people who have very little things and they experience a lot of value" - [Matina]
• "The legacy of someone and the effect that they have in your life can never be taken away... that's the most meaningful part of the wealth that you can give others" - [Matina]
• "Research shows that family wealth is almost never lost due to poor financial decisions, its almost always lost by a breakdown in relationships and communication with co-inheritors" - [Mike]
• "You cannot make decisions without understanding who you are because who you are will affect how that thing will play out in your life" - [Matina]

Key Takeaways:

• Matina describes an "Inheritance Muse" as someone who inspires others in relation to their inheritance. Inheritance can either be tangible or intangible. The intangible inheritance is more important because it is more influential and less vulnerable. It affects our beliefs, attitude towards life, abilities, and self-confidence.
• Since parents are not perfect, sometimes we get good gifts in bad packages, so to understand intangible inheritance, sometimes we have to open our minds and look at what is there and how we can manage it so it adds value to us.
• Describing how she started her work with inheritance, Matina shares her back story; although born in Athens, her family had to relocate to Canada following a political event that made the family unsafe. A key determining factor in her career was the heritage and culture her parents brought from Athens, which influenced her greatly.
• This spurred her on to study interior design and renovation of historic homes and eventually become a cultural entrepreneur. Following the death of her parents, she inherited the home in Athens and had to curate everything by herself and started to work on also curating the influence her parents had on her as part of the legacy for her children.
• Storytelling is the center of Matina's work; using the stories behind objects owned by clients to resolve issues. Parents need to tell stories about their things to their children because it is unlikely for a child to sell something that has a story to it.
• When navigating inheritance and trying to be a custodian of what has been left behind, employing the concept of "Gratitude" is highly efficacious, in that it helps to understand the value of these things. This gives a reason to own these things and helps us know what our relationship was like with those who left them behind.
• The Legacy Scale: This is a process to understand the personal value of any property to a person irrespective of the market value.
• 2 classes of Real Estate: Objective Real Estate is the first type and it includes properties that have value but no particular personal relationship. Assets such as family homes on the other hand make up the second type of Real Estate which is usually more complicated and may involve co-inheritance.
  
• There are 3 ways you can value something: First is the intrinsic val...

Chris Powers is the Founder and Executive Chairman of Fort Capital and the host of The FORT podcast. Chris is a serial entrepreneur with more than 16 years of real estate development and investment experience. Since founding Fort Capital, the company has invested over $1.4B in Class B industrial, commercial, multifamily, student housing, and residential and land development projects.

His drive to always remain curious, desire to connect with and learn from others led Chris to start his podcast, The FORT. In the FORT, Chris talks with leaders of businesses across real estate and a variety of industries and dives deep into ideas and topics that are not regularly discussed. Chris covers each guest's story and explores in detail the critical moments that led to success, failure, growth, and confidence. He has successfully published over 200 podcast episodes.

Standout Quotes:

• "You only are going to be on this earth one time, you really are not coming back again after the first time; let's make the most of it" - [Chris]
• "Everything that you were mad at your parents for when you were a kid, is everything you respect them for when you're an adult" - [Chris]
• "Money never mattered to my dad, being content and serving others did" - [Chris]
• "I think it's a very special thing in life to really want to be good at something" - [Chris]
• "If you're a parent and you actually can't give your kids the things they want, it makes it almost easy; what's tough is when you can give them what they want and you choose not to" - [Chris]
• "How can you expect someone that grew up with everything easy and given to them, to ever have that burning desire" - [Chris]
• "Kids don't learn by words, they learn by actions, so I can say everything I want to my kids but they're going to be watching what I'm doing" - [Chris]
• "You don't keep families together, particularly with the amplification of wealth, if you're not intentionally practicing the values" - [Mike]
• "We're living in a really cool generation where I think we're going to be able to tell our stories to our kids like nobody's been ever been able to do it before" - [Chris]
• "There's just very few people that matter in this world that you remember because of how much money they had, it's really about what they did... you will be defined by how much people remember you" - [Chris]
• "The majority of businesses that do really well hit singles and doubles over and over"
• "When's enough enough?... it depends on how big of an impact you want to have" - [Chris]
• The first great business decision you're going to make is who you marry" - [Warren Buffet, Chris]
• "There's things in life that are either giving us energy or taking away energy" - [Chris]

Key Takeaways:

• Chris Powers is the Founder and Executive Chairman of Fort Capital. He is also the host of the podcast, "The FORT", as well as a serial entrepreneur with over 16 years of experience in Real Estate Development and Investment Experience. Chris is a first-generation entrepreneur with stories that shaped him down to his relationship with his children.
• Chris's dad was a lawyer who valued education, however, after 13 years of being a lawyer, He decided to become a doctor. With two kids and a wife at home, He left law and started medical school at the age of 39 which took place over 8 years with a financial toll on the family. The experience during those years created the foundation for the impression Chris has about money, feeling fortunate to have been more deprived of things than his peers. Chris also learned the importance of doing things in life that give fulfillment.
• Because of the experience of not having money over those years, Chris became an entrepreneur at a young age to get the money he needed. However, Chris has a fear that his success allows him to skip the chances to deprive his kids of the things they should be deprived of.
• Following the passing of his dad, Chris witnessed a turnout at the funeral and stories that depicted the level of impact people felt while his dad was alive. Although it was a traumatic unexpected event, Chris felt equipped at the time to take the reins in the family because his father had trusted him very early on to do things. This taught Chris that there's a level of transparency that is healthy with children, for them to start learning early on how the family operates.
• "If you study people who are extremely successful in life endeavors, there is a common thread among them where they were in a position to really want something while growing up". This has made Chris understand that it is hard but necessary t...

It's not often we get to hear from a 7th generation American manufacturing family with a company that dates back to 1728 and in their family since 1793. The Hollingsworth & Vose Company is a technical manufacturer with a rich history of R&D and innovation.

Here to share their story with us are Val & Annie Hollingsworth, first cousins and both members of the 6th generation, stewarding this incredible and impactful company to the next generation.

Val Hollingsworth has served as President of Hollingsworth & Vose Company since January 1997, and added the title of Chief Executive Officer in January 1998. He began in operations, working as a Shift Supervisor and as a Production Manager, then held a series of manufacturing, sales, and marketing positions. He served as Mill Manager of our West Groton Mill and General Manager of the Battery Separator Business Unit. While the majority of his career has been at H&V, he also spent two years in the Investment Banking Division at Lehman Brothers in New York. Val earned a BA from the University of Pennsylvania, and an MBA from Dartmouth's Tuck School of Business.

Annie Hollingsworth was elected to the H&V Board of Directors in 1997. She currently serves on the Nominating & Governance and the Executive Compensation committees of the Board. Prior to joining the Board, Annie worked at H&V starting in 1984. She held several positions in Sales and Marketing including Product Manager, Battery Separator and Marketing Manager, Nonwovens. She was instrumental in getting H&V into the battery separator business. Annie’s father, Mark was the CEO of H&V from 1963 – 1983.

Standout Quotes:

• "Our company's history has been one of finding new and more technically oriented products in order to replace products that are maturing and obsolescing... Because the family had so much invested in this, we couldn't take the risk of being obsolete" - [Val Hollingsworth]
• "If you're trying to optimize profitability, which we all are, how do you start to invest in things that may cannibalize an already existing product?" - [Val Hollingsworth]
• "If we could be a good company.... that would attract good people, those good people would do good work" - [Val Hollingsworth]
• "Ultimately, you have to trust other people to become the real experts and get in-depth, so it's more a matter of helping find and develop the right people and giving them what they need" - [Val Hollingsworth]
• "There has always been an unwritten ethic of having to go the extra mile if you're from the family and you're in the business" - [Val Hollingsworth]
• "If the family can contribute in helping set the right tone, and helping nurture the sense of purpose and values that are relevant, both for the family and ultimately for the company... that's invaluable in creating the atmosphere and dynamic that attracts good people" - [Val Hollingsworth]
• "Be a good steward, Don't take it for granted" - [Val Hollingsworth]

Key Takeaways:

• Annie highlights that the company's resilience over the decades comes from a strong focus on customer relationships as well as Research and Development.
• Val notes a conscious intent in the company from the beginning to continually reinvest, describing some of the intricate planning involved in the company's production line.
• The business tries to keep up with a mantra of having the best product in the market, a better one in customer evaluation, and an even better one in the labs.
• Val also describes the role of the workers in building the company's resilience, stressing the importance of having and keeping good people.
• Trusting the employees plays a vital role in creating a balance for Annie and Val, between having knowledge of the technical expertise required in the family business and the job of stewardship.
• Unlike Annie's Father who had to step up to the needs of the company without having much of a choice, Val and Annie were not under any pressure and joined purely out of interest.
• The challenge for the older generation (6th generation) is to be open to change, to understand the important things that can make the company relevant to the next generation, and to know how to communicate with them.
• Annie shares that she would encourage her kids to pursue their passion, as there are many ways to be a good family member or stockholder, but to ensure they continue to honor the company.
• Val points out that with good stewardship, the family business could give meaningful contribution to the world.
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