- Why this is important: more wealth management firms are looking to cater to family offices.
Balentine LLC recently hired Mark Bell as head of family office services and private capital, as the Atlanta-based wealth management firm seeks to respond to recent trends in the private capital space by catering to high net worth investors.
“The explosion of wealth at the high end—call it $100 million up to billionaires—is one of the most transformative changes in the landscape of wealth that’s happened in a really long time,” Bell told Buyouts. “We think that it will have a big impact on private equity.”
Before joining Balentine in April, Bell worked at McKinsey, D.E. Shaw, BlueArc Capital Partners and Diversified Trust, according to the firm’s recent hiring announcement. He has a B.A. from Stanford and a PhD from Oxford.
He said Balentine’s multi-family office services are more workable for families than operating a single-family office.
“It’s usually very expensive…we estimated it at 85 to 150 basis points before investment costs, so if you have $100 million, you’re paying $1 million a year just to have staff who then have to go out and incur investment costs in addition,” Bell told Buyouts.
“We also think the human capital available is limited because you are essentially working for one employer and you don’t have the collaboration, the career advancement, the opportunities of working at a growing firm,” he said.
In catering to wealthy families, Bell said Balentine is following the lead of major financial institutions like Goldman Sachs, but without the conflicts inherent in a company that sells financial products.
“We don’t sell anything but advice, advice and services, we have no product, we don’t have any private equity funds of our own that we would recommend to clients,” Bell said. “We don’t want there to be a Balentine GP product that we are recommending to clients at the cost of anything else, and so for that reason we want to be LPs.”
As far as strategy, Bell said Balentine is most interested in late-stage venture and growth equity, real estate and private debt, and opts to strike a balance between funds, co-investments and direct investments.
“We believe our clients as they approach buyout should be of a view that they have a core position largely built around funds that have different strategies based on the quality of the manager and the nature of the objective of the fund, and that those core positions should be augmented by select co-invests, and even fewer but select direct investments,” Bell told Buyouts.
Meanwhile, Bell added that Balentine is keeping an eye on where the business cycle is.
“There’s so much proverbial dry powder,” he said. “We don’t want to get overextended, particularly on things where our money has to be locked up for a long time.”
Action item: contact Mark Bell at email@example.com.