Direct & Co-Investing for Family Offices with Randy Castleman

Oct 31, 2022

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Randy Castleman advises family offices and institutional investors on their direct investing, fund investing, and fund formation. Years as a family office president, a managing GP of a venture fund, and allocating into privates for a large multifamily office give him a 360-degree view of private direct investing.

Key Highlights:

[00:01 -06:47] Opening Segment

Introduction to Randy Castleman and how direct investing has changed
He shares his story of how he got started in family office management
He was then hired at a large multifamily office to rip and replace their exposure to adventure and growth.
His job is to work with families to discern their intention in doing deals, building intentional portfolios, and diversification

[06:48 - 16:01] Beyond Being Transactional

It is essential to be open and honest about non-financial motivations
Many non-economic motivations don’t show up on questionnaires so it’s important to really ask questions and rephrase them when necessary
There are unique advantages that family offices have within the direct investing space
Not working within the same constraints that an institutional fund manager
Human nature such as messiness could sometimes be a disadvantage such as a lack of intentionality in portfolio building

[16:02 - 33:52] How to De-risk the Disadvantages That Are Inherent within the Family Office Investing Space

Understand the non-financial motivations and really talk through what you’re trying to accomplish
Strategic versus Impact Investing
What financial returns am I looking for from this activity
Consider the deal's lifecycle and its complete trajectory in the future
Have a sense of the behaviors of your co-investors

[33:53 - 36:18] Integrate Best Practices without Undermining the Disadvantages

If you develop your reputation for being good at a certain area amongst your co-investors, they will seek you out
Whether a family office should have an in-house resource or not is half the battle
Younger generations are more interested in direct investing.
Advisors must be relevant and helpful not only to the current generation but to the next and the next

[30:37 - 31:24] Closing Segment

Connect with Randy Castleman on LinkedIn, email him at rcastleman@srfmanagement.com, or visit www.srfmanagement.com

Key Quote:

“I think, along with an intentional portfolio comes an intentional look at any given opportunity.” - Randy Castleman

“It's really important to think about the lifecycle of that deal, all the way to exit what sort of further investment will be necessary.” - Randy Castleman

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