Investing Billions - E214: Inside Look into a $14B Multi-Family Office

Episode Date: September 17, 2025

How can ultra-high-net-worth families invest like endowments—without becoming forced sellers when markets turn? In this episode, I go deep with Greg Brown, Co-CEO of Caprock, on how a modern multi-family office serves UHNW families. Greg explains why Caprock acts as CFO first and CIO second, forecasting liquidity across complex balance sheets before allocating to private markets. We cover the thresholds for when privates make sense, how to structure portfolios for resilience, the role (and limits) of interval funds, and how Caprock uses pooled scale to negotiate economics and secure access to top deals. We also explore tax-alpha strategies like QSBS, Opportunity Zones, and long/short overlays.

You have 14 billion AUA assets under advisement. Talk to me about how pooling your capital, that kind of midway between $10 and $20 billion, positions you in the market to invest into private capital. In what way is that an advantage? In which way is it a disadvantage? We do pool capital across all asset classes to get access to all kinds of opportunities. In cases we're using that red capital to. Negotiate better economics, reduced fees, improved preferred returns, reduced carry, et cetera.

Taking a step back, why would a wealthy family invest in private markets? What's rationale there? Welcome to the high invest podcast where we explore how top institutional investors make their very best investment decisions. I'm your host, David Weisper. Today, I'm speaking with Greg Brown, co-founder and co-CEO at Cap Rock, which oversees over 14 billion. dollars in assets under advisement. We dig into their endowment style approach for wealthy investors, navigating the practical limitations high net worth families face, and the significant tax alpha available for investors in the private market. Without further ado, here's my

conversation with Greg. So, Greg, you're the co-CEO of Caprock. What is Caprock and what problem are you solving? Caprock is a multifamily office that we have built to serve We'll try net worth families with a focus on world-class access to private markets, and we do that tax efficiently. We do it on a completely bespoke basis for each client, and we do it for most of them in values-aligned way. We think of ourselves really playing two roles. We're the family chief financial officer and chief investment officer. Each of those involves a number of functional activities, but we think of our clients as the CEO. and in most cases, that's multi-generational and scope and scale and duration.

We have incredible access on the private investment side, but we are not a product shop. We're a family office for an elite group of clients. Our job is really to help families navigate the complexity that comes along with having a large balance sheet, preserve wealth across generations, and invest in ways that reflect their priorities. We currently serve just over 400 families from 11 offices around the United States and manage a bit over 14 billion of assets. And you say CIO and CFO, so CIO is asset allocation, access and CFO is kind of K1's planning and almost like one is lagging, one is leading. Yeah, and I would put the CFO hat on first. It's really understanding the entirety of the balance sheet, understanding the things that we don't,

control first, and that includes privately, closely held operating companies, real estate portfolios, personal spending. It's really sort of forecasting future liquidity management in both directions. And then understanding the objectives of each of the entities in the estate plan, and so that when we eventually put the CIO hat, we're doing it in the full context of all of the things that may need capital in the future. And that includes a lot of, lot of things we didn't choose and may not even like some of them but it's important to wrap her arms and understanding around them so that those those future obligations particularly to the things that are not liquid are done with a margin for error that that makes it very sustainable

long term and is this forecasting cash management is that something that you sit down with your clients on a weekly monthly quarterly basis and kind of take me behind the scenes there We spend a lot of time up front with families understanding their liquidity needs, their intent for short and long term, charitable planning, intra-family gifting, and just really understand the intent of each entity. And then all of the things on the balance sheet that would potentially consume cash. And many of our clients are entrepreneurs, many of them have been through exits, many of them are. running, you know, their second, third, fourth company, and some of those companies consume capital, some of those companies throw off capital, but really understanding that engine in advance gives us kind of a starting point, and then we refine that over time as new information comes to

us. I think for most families, when we try to uncover things like burn rate, initial estimates that clients have in mind for what that is, tend to be off by a wide margin. And part of this process of refining what actual spending is helps all of us do that with much more precision. Having to look at their kids, credit cards, and their spending. Yeah, exactly. And from a practical standpoint, charitable giving, spending, money, shopping, spending on capital calls, private equity, these are all just liabilities.

on the balance sheet and they all basically are one number or summed into one number at the other day. Yeah, that's right. And on a, I mean, we have the benefit as a family office of looking at the entirety of the balance sheet. We're looking at all of those cash flows and expected cash flows on a, on a blended basis. That gives us much more comfort over time to take on some ill liquidity, whereas firms that I think approach investing from more of an asset management perspective where they are kind of doing a cookie cutter model, they're at a disadvantage because they don't have as much of visibility into what else is going on on the balance sheet. Because we do so much of that upfront discovery of work, we are able to invest more like

an endowment and we have great comfort taking on long-term liquidity elsewhere on the balance sheet when we already understand all of the things that are going to need liquidity near and long-term that we've solved for with a margin for error. One of the biggest trends in finance, perhaps the biggest trend, is this shift towards privates for high net worth, ultra-high net worth family offices, essentially sub-billion dollar pools of capital. Today, 2025, at which net worth is it practical for a high-net worth? investors start having alternatives or significant alternatives exposure in their portfolio.

Yeah, great question. Generally, once a family exceeds at least 10 million of investable assets, they can begin to access some of the benefits of endowment style investing. And that potentially includes meaningful allocations to private equity, venture capital, private credit, private real estate, our average client is much larger than 10 million. But doing what we do is possible at that scale. Because of legal requirements and practical limitations, it gets much more difficult when you get smaller than that. Because of some of the work we do to make opportunities more accessible, we can still do a good job at that level. I previously had the CEO of the The Walton family, the CEO of Cascade Bill Gates family offices, he said one of the things family offices should focus on is making sure that they manage their money and their money doesn't manage them.

Or basically that their money serves them and that they don't serve their money. Are there certain light versions of capital allocation or operational complexity that somebody with $10 million might want to pursue versus somebody that has a whole staff to do the work for that? and just talk to me through that. Yeah, I mean, doing private investing, number one, is very hard to do it well. It's easy to deploy capital in private markets. It's hard to do it well with top quartile managers for many reasons. Having access to great funds is difficult because most great funds that have sort of longstanding, high quality risk-adjusted returns have a lot of other investors who also appreciate that

and have been at the table recurring investors throughout many vintages. And so many of the great platforms that have been around for decades just are very difficult to get into. And then for smaller investors, it can be really difficult to meet the minimums and build out a diversified portfolio when the check sizes and commitments are substantially larger than what would make it make for a comfortable commitment at that level. And then to your point on the administrative overhead and having sort of the administrative complexity, tail wag the dog of the client, their sort of overall objectives, there is a lot of complexity in handling when you have dozens of fund commitments or co-investments,

handling all of the tax documents, making capital calls, managing liquidity, to forecast those things on a blended basis over time. There's a lot of complexity there, and I think all of our clients appreciate what we do as a family office to make that look less difficult than it is. So where does the service that you do for your family office to start

and stop on behalf of your clients in terms of this complexity, cash flow management, and talk to me about how much you go about obfuscating this operational complexity? For every client, we track every cash flow across every entity and serve it to them every month. So we're tracking every capital call, every distribution, characterizing it from a tax perspective and a return perspective. so that we have, you know, ongoing returns across the portfolio and have, you know, very tight control and reporting on cash flow movements in both directions. So there's a lot that goes on from a reporting perspective. From, you know, I describe some of the activities that we perform as the CFO.

A lot of those are kind of building blocks to help us understand and give us context around what each entity on the balance sheet's trying to accomplish. But as a CIO, it's really about sort of starting with a macroeconomic view of the world, the opportunity set, the risks of that environment, which clearly is a changing, you know, it's a moving goalpost, if you will. But once we have that view and are prepared to deploy capital, we spent a lot of time putting opportunities in the toolbox across all asset classes and then led our advisory teams who have the best understanding of what each client is trying to

accomplish make those tools available to those teams and then the teams make recommendations to clients for sort of the right pieces of the puzzle to accomplish the needs of each of those entities. So it's really those two roles. There's a lot behind those and within our firm, there are many sort of functional teams that are playing a role there. But it's really about, you know, kind of managing the balance sheet, managing those future obligations and then building an elite group of opportunities to fit, you know, our macroeconomic view. What we don't do is a lot of the more concierge services. So we're not walking our client's pets. We're not fueling the jets. But we might help them, you know, by the homes or

by the plane or the boats or finances. So things that have sort of an impact on the balance sheet, we're involved in things that have more of a personal impact on a day-to-day basis. We're probably less involved in. But as a family office, we're not trying to do what we do for everyone. We're trying to do a lot for a small number of families versus the inverse, which I think is more akin to what most of our peers in the industry do. At the time of this recording, you have 14 billion AUA assets under advisement. Talk to me about how pooling your capital and that kind of midway between 10 and 20 billion dollars positions you in the market to invest into private a capital. In what way, is that an advantage? In which way is it a disadvantage?

Yes. We do pool capital across all asset classes to get access to all kinds of opportunities. In some cases, we're using that breadth of capital to negotiate better economics, reduced fees, improved preferred returns, reduced carry, et cetera. Many of the co-investments that we do are direct-to-balance sheets, particularly for companies where we can be helpful to those portfolio companies of GPs that we know well. But there are many scenarios where having pooled capital in pooled vehicles also makes sense, and we do a fair amount of that. There are opportunities where there are limited slots

in funds or limited slots and co-investments. We have pulled vehicles. We've done seven vintages of pulled vehicles in private markets that are all fee-free and carry-free to our clients. And that alone is exceedingly rare for firms in our industry. In those vehicles, we do LB commitments

to things that are very difficult to get into. And then we also do co-investments. in many, many great companies over the years. We've been in SpaceX multiple times going back over a decade. We're in companies like Anderol and Serronic, and we were in Palantir when it was private, Adipar, Anthropic, and many others. But all of those, you know, for our clients are as direct as you can get

and with no economics to us. So it's their special opportunities. these days private markets are a pretty important place to be i was speaking to the cio of fordham university earlier today we were discussing interval funds and one of the things that she mentioned was that they kind of are our poor fit for liquidity because just the time that you need the liquidity you know everyone's rushing for the gates and they can't get that much liquidity and then they're also poor for the illiquid bucket because there's some cash drag there as well because you basically have to invest in some liquid parts of the portfolio in order to

what are your views on interval funds specifically for taxable investors interval funds are a sensible part of the broader democratization of private markets and particularly for firms advisory firms that have smaller clients or maybe not sufficient scale or the clients aren't big enough or their investment teams are not sophisticated enough to develop, you know, direct access to top opportunities in private markets. It's really hard to develop that access. It's taken, we've been doing this 20 years and probably spent, you know, the great majority of that time, you know, cultivating the access that we have today. So I think they have a place. But for,

I think it's for exceptional opportunities where they're producing sufficient liquidity to match the redemption liquidity requirements of the fund structure. I think when you have a redemption timeline mismatch is when you kind of run into problems and more than likely, to her point, you probably run into gating and not as much liquidity as you thought was there in the first place. we we use interval funds i would say very sparingly there are a couple of couple situations where they work well but for the most part our private markets access is it's illiquid we know it's illiquid our clients know it's illiquid and we have solved the liquidity on their balance sheets elsewhere in advance which allows us to not sort of wrap illiquid assets in semi-liquid vehicles which to your point is where problems arise. So what's the best practice today, Q3, 2025, when it comes to cash flow management for family offices?

So you commit $10 million into a private equity fund. You know it's going to be drawn over the next three to five years. What practical tool kit do you have to manage the liquidity? Good question and difficult problem. I think when you're making a single commitment, to a fund, you have a difficult time predicting when exactly the capital calls will be made. Most funds do not do that on a very predictable schedule. But when you have dozens or hundreds of funds where collectively you can manage the liquidity,

kind of the combined liquidity forecast of those as a group, it can start to get much more predictable. And so the way we think about that is to kind of break commitments down into short-term needs, say the next six months or so, where we'll keep forecasted liquidity that should be needed to cover things like personal burn rate and any known upcoming expenses in the short term, plus those capital calls that are in the next six months or so. keep those in very liquid short duration treasuries or money markets or something that's quickly available and then things that are a little bit longer term call it six months to

18 months or so we can put in something that's a little longer duration that may be semi liquid credit fund or commitments that we'd previously made to semi liquid credit where we can redeem them over that timeline to in a advance of those upcoming capital calls. And then for the capital calls that are quite a bit further out, you know, two plus years out, we can deploy those into, you know, longer duration. What we try not to do is have more equity exposure than necessary to those assets. What we don't want to be doing is redeeming or selling assets, you know, at the wrong time in the event that, you know, the markets get crossed. We don't want to be raising liquidity.

from the wrong assets at the wrong time. So we try to make sure we keep those extra liquid, have some margin for error, and have several buckets we can get liquidity from if there is more of an unexpected raise required. Double-click on the issues that arise from getting liquidity from, quote-unquote, the wrong assets on the wrong time. Is it some tax drag?

Is it just that you're selling that the absolute wrong time? Tell me more about that. Well, I mean, if you look historically at times when equity markets have had a, you know, sort of a quick drawdown. And if we had been expecting to be able to get capital from equity markets for capital calls in April or May of 2020, because those were quote unquote liquid buckets, but their equities and they obviously got, you know, beat up tremendously in a short period of time, if we were having to see. sell assets and move out of those equity positions at that point, we would have been selling at the bottom. And it's never a recipe for maximizing value. So we try to make sure, because we're making, at the moment, 14 billion of capital, almost 7 billion of that is deployed into things that are not stocks and bonds. So we have a tremendous, on a blended basis across our client base,

of a tremendous amount of non-liquid commitment capital. And so it's important to make sure we understand the calculus for those capital calls and the sources that will fund those future capital obligations. So you just don't want to be in a position where you're selling at the same time everyone else in the market is selling. We want to be opportunistic buyers when there's a drawdown in public markets or in other asset classes, you know, not a seller. One of the dirty list secrets of fund of funds is that they love to overcommit to venture funds because they get some distributions back.

And is there ever a reason to overcommit in your equity bucket, knowing that you would have to sell some of your public bucket in order to make up in these couple standard deviation liquidity crunches? Yeah, I think most CIOs that do endowment style investing would say it's logical to overcomit somewhat over time, knowing that you're going to be feathering in multiple vintages and that most of these funds take, you know, three plus years to deploy. But it really depends on, I think you have to get a bit more granular and look at the underlying history of each GP platform, each fund platform, what has been their timeline,

what is their expectation, what has been their expectation or track record of returning capital. And that's an area where you need to be really careful because there have historically been periods where DPI is limited. And we're kind of at the tail into one of those right now where there are plenty of new venture and private equity funds and real estate funds created in 2020 and 2021, but not nearly as much capital, even though there's a lot of value being created in many of those fund platforms, not as much value has been returned to. LPs. So if you overcommitted, you know, too much, you may have gotten over your skis and created a problem. Said another way, when there's not a lot of DPI in many markets, it's highly correlated. So you might think you have commitment, private credit or private equity, but if there's just no DPI, it could be correlated even across asset classes.

That's right. And it seems like the only solution that people talk about really is sex. secondaries selling, and of course, it could be painful to sell at a 10, 15, 20% discount. You talked about selling out of your public book, which is also painful. Are there practical lending tools that are available to high net worth investors? Double-click a little bit on other tools that are available to solve this problem. For us, if we are sellers in the secondary markets, it's likely because they're was a meaningful, unexpected material capital need that wasn't forecast.

We love the secondary market. It provides all kinds of liquidity for early employees, early investors, founders, certainly in the venture market, but also even for tail interests in LP commitments in private equity. But I would say more often than not, we are a buyer because of the discounts you referenced. you know, probably 19 out of 20 times we're engaged in secondaries. It's because we're buying something, not selling. If we're selling, it's probably because there was a large,

unforecasted capital need that we didn't see coming, which, you know, wearing the CFO hat, that would be a mistake that we would be, you know, sort of navigating around, and not necessarily ours, but sometimes things come up in terms of, demand for capital and we have to navigate those. But it is a great tool. And unlike endowments and pension funds and foundations, you have to deal with a taxable aspect of your investor base and your client base. Tell me about how that differs your asset allocation strategy and also what tools do you use in order to make decisions on a post-tax basis?

Yes, a great majority of our clients are taxable investors, except for some of their entities like IRAs, 401Ks and family foundations, which there are many. But we have many approaches to navigate tax, every investment that we look at. We're looking at the net of tax effect and making sure that we're putting it in the right entity, the right time, the right place. For example, if someone has a meaningful income that's easily covering their personal expenses, we're not going to create a lot of ordinary income taxable gains elsewhere in the portfolio. But for someone who was a senior executive and then retires and suddenly no longer has that income, then we may layer in a radically different approach to. yield creation.

But we use many, many tools to navigate the tax picture. For early stage investing, we do a lot of seed and up through Series A investments in venture capital that create QSBS, qualified small business stock gains that create a lot of headroom for tax free growth. We use qualified opportunity zone, invests. investments in real estate to defer taxes and then grow tax-free over the last several years, and there's been a new version of that just passed legislation. We use tax alpha, long-short equity strategies through firms like Quantino and AQR, 130,

and many flavors of that to accomplish different things. generate, you know, material tax alpha. We use a lot of estate planning vehicles, you know, spouse lifetime access trust, grats, clats, CRTs to generational gifting along the way, private placement, life insurance, donor advice funds and foundations. I mean, there obviously are many tools, but we're using them all. You mentioned tax loss harvesting. It's probably the most, the hottest tool right now in, in, in, tax planning on the high net worth side. Tell me about that.

And also, you mentioned the 130, 30, 30, but there's bigger, there's 300, 200. Tell me about these strategies, A, when you use them, and also when could they go awry? Quantino, AQR, and others have these strategies that, and they work in many scenarios, so they're kind of different flavors of them, but the sort of first and probably largest one of those is called the 130-30. And think of the 100 part of the 130 as being a core portfolio. And the 30 up and 30 down is where we borrow against the base position to add 30 percent levered access to the longs that the manager likes. And then we simultaneously short 30 percent and get a short interest rebate from the custodian that covers the cost almost entirely of the margin.

So that the net effect of that is you're getting the core underlying exposure you would have had to begin with, whether that's in an S&P 500 portfolio or it's in concentrated assets that you don't even want to sell. You can do that as well. They call it an overlay portfolio. And then in a market where good things go up, you lose on the shorts and in a market where things go down, you make money on the shorts but lose on the 30% long, you're always in a position where you're able to harvest losses in a good market or a bad market. And in a normal tax loss harvesting separate account, you would see somewhere between 50 and 100 basis points of, of tax alpha created in these in this 13030 strategy it's about three times that and to your point you it doesn't have to be limited to 30 percent leverage you can you can do 45 45 with no change in

documentation and you can go substantially higher than that which some people use with compare that with fixed income you can go you know 225 in both directions the more leverage you use, the more you probably will want really stable assets as the sort of core exposure. Otherwise, it's your question of what can go wrong. Capital, you can get a margin call and have to unwind the strategy. But it's a powerful, you asked why would someone use that. It's a powerful way to generate tax losses to offset other gains that we're seeing elsewhere in the portfolio.

So if someone has a concentrated low basis position, maybe they took their company public or received a public company interest from some other company that they sold to that public company, if you have a low basis position and you're expecting to harvest material gains or you just did harvest material gains, these losses can be used to offset those gains. And it's become popular, I would say, very quickly. Yeah. So taking a step back, why would a wealthy family invest in private markets? What's the rationale there? Well, private markets drive large portions of the economy. In fact, 87% of all companies in the United States with more than 100 million of revenue are private. the average new public company in the year 2000 was four and a half years old and there were many of them on a regular basis becoming public the average new public company now is over 12 years old and a lot of that has been enabled by the secondary market we talked about earlier but companies like SpaceX and Andrel and Open AI and Anthropic and Stripe are worth 50 billion to hundreds of billions of dollars And if you're waiting for those companies to become public, you're missing out on critical years of massive growth. As an example, Anthropic over the last four years went from five years ago, it didn't exist, but over the last four years, it went from 10 million of revenue to 100 million of revenue, a billion last year and is projecting, this is public information, but is projecting, you know, 10 plus billion in revenue this year, that's a thousand percent annual growth. year over year, four years in a row, and the average of the S&P 500 last year was just over 5%.

There's a lot of other data around this, but private markets is just a really important place to be invested for those who can. And with the democratization of private markets, making that more accessible, some of that via new legislation, I think that's important to make it a available to more people. But for now, the ultra-net worth proud, if they have the right advice, they can get access to a lot of the most interesting companies in the world. I had the CIO of Hurtle Callahan, Brad Conger. One of the things that he's really analyzed is how much small-cap value has changed in the public markets. So obviously there was this value versus growth, kind of lost decade, and then it's bounced back a little bit. But

fundamentally what is value companies in the public markets today fundamentally the companies are different so he argues that there's a lot of adverse selections that only the companies that have to go public at the smaller end are now small small cap value and then also a lot of those smaller cap companies actually fall in large cap companies so they're just like poorly managed large cap companies whereas before you had companies go public earlier now they're actually private companies. So to be truly diversified today, you do need access to the private markets. You can't really be diversified just through the public markets. Exactly. It's a good observation. Public markets are very different than they were 20 years ago. And there are just aren't as many

of them. There's not as much sort of velocity of new issue coming to the market. And it's It's unfortunate for retail investors, for smaller investors, but for ultra-high net worth investors, you sort of have a captive market with relatively exclusive access. But a lot of that has been created by the regulatory environment that makes it very costly to be a public company. And so if you have secondary markets as a founder or early employee or early investor to kind of take the pressure off of boards of private companies to become public, then the runway for them to remain public just can be in place for a lot longer. Do you worry that the democratization of the private markets, more people having access to

it's going to drive down the returns? In other words, it's just supply and demand. More demand chasing finite supply will drive down returns. I think that the pie is growing fast enough that that's less of an issue. And I think the sort of social dynamics of giving more people access to those markets are probably more important than the returns of the top, you know, 0.01%, which, you know, I say selflessly given that that is my client base. I think also net new companies should be funded startups. And you could argue maybe the risk of return isn't even there for investors. But if they are funded, they're going to be now Series A company, series B company. so the pie kid could grow. But about in terms of private credit,

it's arguably the hottest asset class over the last several years. Are you concerned that it's overheating today and that there's too much money chasing too few opportunities? You know, again, that's another market where the pie is growing quickly. And 20 years ago, a lot of private credit deals were happening with banks.

And because, again, because of the regulatory environment, making it more and more difficult for banks to lend and, you know, threading the needle on their Tier 1 capital requirements. That market has been pushed to private credit lenders. We think private credit has, you know, can offer very attractive, risk-adjusted returns and often with lower volatility than public markets. You know, for taxable investors, it's tricky to navigate, and we sometimes use tax advantage wrappers to use private credit where we would do less of that for our taxable investment accounts. But, you know, still, there's a lot of, there are a lot of interesting platforms that do a tremendous job at scale.

the firms like Cliffwater that, you know, have grown, to your point, quickly alongside many others, but that drive, you know, great risk-adjusted returns and have, you know, giant pools of borrowers and are able to navigate the liquidity that they're offering to their OPEs. And just to double click on that, you're using private credit, which to a lot of people is attractive, but essentially short-term income could be up to 50%. You're putting into non-taxable entities like PPLI or private placement life insurance. Tell me about that.

I've heard from, I've heard conflicting things on PPLI. Some people say that it's very complicated. Some people say it's just a 1099 every year. How complex of a structure is that? And at which asset size does it become practical to pay for a vehicle like that? The accessibility of PPLI has changed rather dramatically in the last few years. It used to be a tool for only very ultra-net-worth families and the typical PPLI commitments that were being made were many, many tens of millions. And those are still happening.

But that has the infrastructure and the platforms that offer that have, have. made it very in a very effective tool at much smaller levels, single, single digit millions, which is still a lot, but it's, it's kind of perfected that. And you can put many kinds of investments in PPLI, cash, stocks, bonds, private investments, and they grow without being taxed and take them out later. If you do it in a tax efficient, you can get the capital, out later in a tax-efficient way and you can borrow against it along the way. So it's a great tool. I would say it's not completely gone mainstream, but it likely will unless there's a legislation change, but that's been forecast for a long time and hasn't happened to date.

If you could go back 19 years ago when you co-founded Caprock, was one piece of advice that you wish you knew that would have either accelerated your career or helped you avoid costly mistakes. When we set out to build this nearly two decades ago, our aspirations for what was possible were kind of based on where the world had come from. And we spent, for the first five years or so, we spent most of our time talking about what is a family office, evangelizing the category, talking about why should I pursue private markets at all? What does it mean to have an aligned approach to family office investing? How do you contrast that with a bank or a broker?

There was all this sort of field building that was required in order to tell the story. And certainly most people at that point didn't know who Caprock was. fast forward today in the ultra high net worth space most families understand what alignment means and why it's important almost everyone these days understands that private markets are a key part of the total capital market scene especially among the most innovative companies and that great risk-adjusted returns are possible in things like private equity and private real estate and private credit. And they understand some differentiation between the brokerage platforms and independent

firms in terms of alignment. And in most cases, when we meet with someone, they know who Caprock is. And so that makes the whole thing dramatically easier to scale when you don't have to spend all of your time evangelizing the category and can really talk about, you know, what we can do for a family more directly. I think if I were to go back and replay some of what we did and do it differently, I think I would do it faster and, you know, be more bold in terms of the internal investments that we made to scale more quickly.

for 16 years in our case, every investment in infrastructure and team and office and, you know, the entire platform was a personal capital call. And I think that made us reticent to make too many investments at the same time. And these days, it's much more obvious, you know, what the opportunity is. And we've been able to achieve sufficient scale that we also understand that. when we get more scale to a degree, we get better. The opportunities that improves, the infrastructure improves. And so there's a sweet spot where scale makes you better.

But above a certain point, scale tends to, you know, I've noticed with some of our peers, with too much scale, then the whole thing can become product-off. or mechanized such that you lose the personal touch. But I think we've done a good job of managing that the balance of, you know, do a lot for a small number of families and understand that we're not trying to do this for everyone. Speaking of scale, a lot of multifamily offices, they used to offer these kind of venture co-invest, like you mentioned, seronic, anthropic, SpaceX,

and then they stopped doing it because they found that even if somebody gets a 10x in one vehicle, a zero X and another vehicle, is destructive to kind of the relationship with the client. How have you been able to scale that? And what's your philosophy around that? We've made many, many of those investments. We do them a couple of ways. We do them in pooled vehicles that I mentioned earlier are fee-free and carry-free.

Those are really parts of a portfolio. And so if you have an outsized positive outcome or negative outcome, it's still part of a portfolio. What we also do for kind of high conviction opportunities where we think, you know, there's a substantial upside opportunity and a very low probability of a negative outcome. And if there are, you know, sufficient slots available and there's sufficient capital available, in addition to doing those co-investments through the full vehicles, we will do them, you know, direct with clients. I think many clients appreciate being part of those things, and especially with a platform that is not wrapping them in extra economics and to be able to deliver things like SpaceX or Anthropic or some of the other names you just mentioned,

direct to clients and in many cases direct to the cap table of those companies or in very efficient SPVs alongside world-class general partners of, you know, top quartile or better venture funds and private equity funds, that's a pretty special opportunity. And those are, you know, many of those businesses have become, you know, category winners. And our clients have been, been able to watch and be part of that journey, you know, long before the average investor is at the table in public markets. Well, Greg, this has been an incredible deep. dive on high networks and family offices. I appreciate you taking the time and look forward

to continuing conversation live. Thank you. I appreciate it. Thanks for having me and enjoyed the conversation. Thanks for listening to my conversation. If you enjoyed this episode, please share with a friend. This helps us grow. Also provides the very best feedback when we review the episode's analytics. Thank you for your support.