Tax Considerations in Multifamily Offices

In this episode of How I Invest, I speak with Scott Welch, Chief Investment Officer and Partner at Certuity, a multi‑family office managing over $4 billion in assets. Scott joined Certuity’s Board of Managers in 2020, and now leads the investment strategy and participates actively in risk management across all facets of the firm's investments, including portfolio architecture, asset allocation, investment due diligence, and manager selection We talk about what’s keeping him up at night in public markets, his views on the Fed and interest rate policy, and how Certuity builds globally diversified portfolios that balance risk factor, asset class, and geographic exposure. We also go deep into taxes, where Certuity aggressively harvests losses using market-neutral overlays to create "tax alpha" for their clients.

-- Highlights:

• The logic behind all-weather portfolios—and how they protect investor discipline
• Why 20–25% is the sweet spot for most families in private investments
• How Certuity uses global diversification, risk factors, and asset class tilts
• The rise of market-neutral tax overlays and the case for tax alpha
• A CIO’s view on the Fed, interest rates, and Powell’s successor
• Why Scott is bullish on sports ownership and sailing as an asset class
• How Certuity sources private equity and credit managers—and the role of client networks
• When they’ll use fund-of-funds and when they go direct

-- Guest Bio: Scott Welch, CIMA®, is the Chief Investment Officer and a Partner at Certuity, a $4 billion multi-family office, where he leads the investment strategy team and serves on the Board of Managers and the firm’s risk management committee. He is responsible for portfolio architecture, asset allocation, manager due diligence, and investment decision-making across client portfolios. Prior to joining Certuity in 2020, Scott held senior roles including CIO of WisdomTree’s model portfolios, CIO of Dynasty Financial Partners, and Co-Founder and CIO of Fortigent, a $75 billion investment platform later acquired by LPL Financial. He began his career with over a decade on Wall Street. Scott holds the Certified Investment Management Analyst (CIMA®) designation and certificates in Investment Strategist, Advanced Investment Strategist, and Alternative Investments from the Investments & Wealth Institute (IWI). He has served on IWI’s board of directors, the ABA Wealth Management & Trust Conference advisory board, and the editorial boards of the Journal of Wealth Management and Investments & Wealth Monitor. In 2024, he received the Wealth Management Impact Award from IWI. Scott earned a B.S. in Mathematics from the University of California, Irvine, and an MBA in Finance from the University of Massachusetts at Amherst.

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LinkedIn: David Weisburd: https://www.linkedin.com/in/dweisburd/ Scott Welch: https://www.linkedin.com/in/scottwelch3/

Links Certuity: https://www.linkedin.com/company/certuity/

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(0:00) Episode preview (0:05) Concerns in public markets and valuations (1:45) Policy framework, Fed independence, and decision-making (5:21) Fed chair's political influence and market reactions (10:12) Preparing clients for Federal Reserve changes (12:20) Behavioral finance, global diversification, and manager sourcing (18:18) Rebalancing, valuation differentials, and alternatives (22:48) Client preferences and strategies for illiquid investments (29:53) Informational alpha, taxes, fees, and sports team investments (35:40) Approaching private equity and the role of fund of funds (46:49) Streamlining Alt Plus and advice for finance professionals (49:42) AI's impact on careers and investment strategy for the youth (52:03) Best management advice and importance of strong teams (56:00) Educational system's shortcomings and closing remarks (56:57) Closing remarks