"I have, in my partner George Roberts, a person who is the most wonderful man in the world to me. He's like a brother to me. Creating with him, being side by side with him, in whatever we try to do, is a real pleasure to me."
Henry R. Kravis, co-founder of KKR
Introduction: How Steve Jobs Created A Family Office
To understand our multi-family office and the global world-class work that we do every day, it might be helpful for you to understand what a family office is and why they matter in the global financial markets. Put another way, if you do not know what a "family office" is or why you should care, you've come to the right place.
To give you a practical, real life example, you need to look no further than Steve Jobs, the American founder of Apple Computer and Pixar, who created a "first generation family office" based on his genius, drive, and creativity. When Steve Jobs died in 2011 due to complications from a relapse of his previously treated islet-cell neuroendocrine pancreatic cancer, his wife, Laurene Powell Jobs, inherited $17.9 billion from the Stephen P. Jobs Trust to become the fourth-richest woman in the world and the 49th wealthiest person on the 2017 Forbes annual list of world billionaires. Today, Laurene Powell Jobs is the richest woman in Silicon Valley, the largest shareholder in Disney, and uses her family office to promote social causes and philanthropy that are the heart of her family's values and vision. Laurene Jobs is the founder of Emerson Collective, which promotes entrepreneurship to advance social reform, and the co-founder of Collect Track, a nonprofit. In a January 2017 SEC filing, the Laurene Powell Jobs Trust disclosed that she sold some of its stake in Disney; the trust owns 2.5% of Disney, 4% of the media firm, and today 0.7% of Apple.
Steve Jobs' family office is one example of why you need to sit up and become intelligent about global family office LPs and the world-wide impact and change they are making in our global economy. At Privos, we believe that the legacy of Steve Jobs and his legacy as the hard driving, creative, brilliant, tough, entrepreneur that we strive to replicate at our firm every day.
To further understand the values and DNA of our firm, we ask that you watch the following short video clip of Sir Johnathan "Jony" Ivy, Apple's world famous Chief Design Officer (CDO), giving his moving eulogy for Steve Jobs, his best friend, during Steve Jobs' Memorial Service that took place on Apple's campus in Cupertino, California. Jony Ivy's short, seven minute eulogy is one of the most powerful, uplifting, joyful, and inspirational tributes to a best friend and business partner that hold dear at our firm. Jony Ivy's short eulogy in which he describes the "bold, crazy and magnificent" ideas that Steve Jobs inspired embodies the vision and mission that we hold dear and inspires us everyday at Privos.
You can view the eulogy here: https://www.youtube.com/watch?v=GnGI76__sSA
Privos Capital: Our Work & What We Do As A Multi-Family Office
As a multi-family office LP, Privos Capital works with our global family office LP partners to grow their world-wide holdings, investment, funds, assets, portfolio companies, and foundations, by sourcing and partnering with other international family office LPs and capital partners around the world. From the Arab Spring to the Global Financial Crisis, our people have built an impressive track record of helping our single, multi-family offices, and sovereign family office LP partners navigate today’s turbulent financial markets, increase business development opportunities, grow revenue, access the capital markets, form strategic alliances, and get international deals done.
Our family office partners work with our firm to gain access to our people and their extraordinary talent, our proprietary global family office relationships, incredible deal flow, and world class track record that is second to none in our industry. Our firm is a leading voice in partnering with global family offices in the Emerging Markets, BRICS, N-11, and Frontier Markets around the world.
Our people have deep expertise in direct, co-investments, and alternative investments. We understand complex global capital flows and under what rock capital and partnerships can be sourced. In this complex, geo-politically charged, global investment climate, our people have deep cultural understanding of the Arab world and appreciate the opportunities and challenges that family offices in Latin America, Africa, Eastern Europe, the Nordics, Australia, the ASEAN countries, China, and elsewhere all face in attempting to engage in international commerce. Our CEO has lived in and worked in the US, London, and Middle East and travels extensively around the world every month to work with our family office partners on highly confidential and complex global matters. We have broad capabilities and deep expertise advising sovereign royal families and leading Arab family office partners from the GCC, MENA, and Levant regions of the Middle East. We understand how to execute and get deals done around the world.
As leading family offices in the Emerging and Frontier Markets achieve extraordinary success, whether perhaps by selling their prize assets to private equity GPs, going public, or finding the right strategic partner for a trade sale, our people have deep experience working on highly complex, confidential, joint ventures and “club deals." Because Privos is agnostic to the size, location, or assets under management (AUM) of a family office, we have the resources to undertake significant engagements and execute on opportunities in BRICS, N-11, and the Frontier Markets of the Emerging Markets. Our offices, people, and partners are either located in your city or a short flight from the location of your family office no matter where in the world you are located. We will travel "in person" to your family office for a meeting from Buenos Aires to Lima, Cape Town to London, KL to Perth, in a matter of hours if we cannot walk across the street in our main global offices. We are a traditional firm. We believe that in-person meetings are good business, that getting on a 20 hour flight for a meeting with you is a sign of respect, that using the old fashion telephone is preferable to email, texting, or sending a WhatsApp message. We returns calls. We welcome you to our offices around the world. And, shockingly, we actually believe that "doing lunch" or having a lovely dinner makes good business sense.
As a firm, we welcome the involvement and active work and participation of the children, relatives, and grandchildren of our family office partners. For instance, we recently welcomed 12 members of one of our family office partner that owns a national airline to our New York offices to discuss the growth, exit strategy, and financing needs of the family's core asset, followed by more work on how our airline family partners will re-invest the future capital from the upcoming aviation liquidity event that we are quarterbacking; our work with our airline partner may also include interviewing and selecting the private equity GP firms that are worthy of the opportunity to have an audience with our family office and their 50 year legacy management team during the process, selecting and partnering with global wealth managers, lawyers, trustees, investment bankers, and asset managers whose values are aligned with our partners, running the manager selection and asset allocation strategy post-exit to help our family office partner select the best global private equity GPs, hedge funds, and asset managers who can both grow and preserve our partner's capital and the legacy of the family over the next 100 years. We have built over time as a firm a true global partnership and close working relationship with trusted advisors of our family office partners - investment bankers, lawyers, financial advisors, wealth managers, CPAs, CFOs and others who we partners with to achieve the goals and objectives of our family office partners.
Global family offices trust Privos Capital to partner, co-invest and advise them on all aspects of managing their far-flung, international portfolio companies and overall financial activities. We bring the highest standards of technical excellence together with the best practices and practical wisdom of experience to work on transactions that shape family office success around the world. As private equity utilizes a broad range of sophisticated investment structures in their transactions with family offices, including PIPEs (private investment in public equities), leverage buyouts, and growth equity, our people protect our family office partners and help them achieve similar success in their international growth ambitions. Our people are experts in all aspects of estate planning, in bound and outbound investments, investor visas, onshore and offshore trust structures, family governance, philanthropy, and foundations.
As a firm, we play by the rules of the road in international business and have a zero tolerance policy for any family office partner, vendor, strategic partner, or professional who does not share our rigid and inflexible view of "best practices" in following the legal standards that we must all play by in conducting global commerce. Put another way, we understand regulatory issues and how to strictly follow and adhere to the complicated "rules of the road" including FCPA, OFAC, and other US, UK, EU, and global legal frameworks in pursuing international business. For instance, one of the principles of our firm worked at White & Case, was a former law firm partner prior to joining our firm, and manages our panel counsel and outside counsel of our family office partners world-wide. Thus, as a firm we have a deep and sophisticated understanding of US and international compliance and work and have a zero tolerance for unethical, illegal or inappropriate actions or behavior of anyone that we work with around the world.
Privos Capital and our family office partners could not be successful without the support and world-wide expertise of a wide range of professionals on every continent who collaborate with us to provide services and expertise to our family office partners that Privos, by choice, does not provide, including law firms, investment banks, accounting firms, management consulting firms, risk management firms, portfolio managers, wealth and investment advisors, CPAs, production companies, talent agencies, public relations, third party marketers, placement agents, chartered accounts, restructuring, technology, concierge services, private jet or aviation services, global security, investigation, investment management, and other service professionals.
What We Don't Do By Choice
As an international multi-family office, it is important to let you know, when you visit our website, the work that we do not do at our firm, by choice, to save you time reaching out to us for the wrong reasons. We are happy to report that we do not mange money for our family office partners, we are not wealth advisors, FA (financial advisors), we are not pitching your family wealth products to "build our book," nor do we sell or market investment products or funds. We are not hedge fund third party marketers, private equity placement agents, brokers, or investment bankers.
We aren't in the business of helping you avoid FACTA, FCPA or OFAC, or advise you on how to set up some dodgy off shore tax shelter to avoid your obligations; it's our experience that birth, death and taxes are all sure things in life for all of us. We pay a ton of tax and hate it like the rest of you but view it as the privilege of adulthood. Conversely, we are not asset managers, hedge fund managers, private equity GPs, bankers, or trust fund administrators, nor do we ever provide legal, investment banking, tax, trust, structuring, private equity placement agent, off shore advice, hedge fund third party marketing services to our family office partners. Anyway, that's the mandatory disclaimer stuff that's negative in tone but hopefully positive in that it cuts down on inquiries to our firm that are perhaps misguided and saves you time.
The good news is that for important services like legal, investment banking, hedge fund third party marketing, private equity placement services, tax, accounting, wealth advisory - these very important services are critical in the family office world, and when we need these services we simply form collaborations and "best friend" relationships with professionals in these mission critical disciplines. Thus, we always welcome and love to develop new relationships with any world-class global professional or firm who is interested in exploring a relationship with us to better serve our family offices and help their businesses participate in international business. So, don't be shy, contact us if you would like to explore starting a new friendship or relationship with us, but it is very important that we let you know what our firm does not do. After this disclaimer of sorts you feel that you want to reach out to us, we are easy to reach, don't bite, and promise to always get back to you the same day you contact us. We may not be able to help you slay the dragons or cure what ails you, but we will always do our best to steer you in the right direction without judgement and hopefully with some humor and good cheer. So call us.
Privos Capital works with our family office partners to manage risk in their global portfolio companies, funds and world-wide businesses. Clearly, in our 24/7 world, managing risk is difficult for the most sophisticated family office. If JP Morgan’s Jamie Dimon, one of the finest CEOs in the world, failed to stop the rouge London Whale traders who, as reported in the financial press, allegedly amassed growing positions in complex derivatives, painted the tape, ignored risk limits, misled management, and speculated their way into trouble five years after the collapse of Lehman and three years after the passage of Dodd-Frank Act, how does a family office with much more limited means than a global bank manage risk across their holdings, funds, and portfolio companies? That is the question our family office partners struggle with on a daily basis and turn to Privos for sound, practical advice and guidance on a wide range of risk management issues.
For an international family office, risk management is about controlling operations, supervising your employees, maintaining adequate risk controls, being transparent to the market, and employing the best team of professional to guide you through times of market calm and turmoil. Family offices must have sophisticated, professional advisers and lawyers counseling them on international counter-party risk, regulatory compliance, Anti-Money Laundering (AML), Office of Foreign Assets Control (OFAC) compliance, as well as Bank Secrecy Act (BSA), the U.S. Patriot Act, OFAC regulations, Foreign Account Tax Compliance Act (FATCA) and the Foreign Corrupt Practices Act (FCPA) in order that family offices and their partners comply with the letter and spirit of all international laws. We believe that the core of risk management is about values, telling the truth, and doing the right thing, which, in the end, speaks to the issue of putting the “right people” on the boat to guide your ship more than what risk model is in your toolbox.
As an American firm, Privos has a zero tolerance policy and will refuse to work with any family office, their advisors, agents and partners around the world who fail to follow our rigid compliance practices and fail to follow the letter and spirit of U.S. law that governs our conduct. We embrace and follow the principles and practices articled in the Yates Memo (formally known as the DOJ's Individual Accountability Policy), which can be found here: https://www.justice.gov/dag/file/769036/download. We believe that you can win in international business by following the "rules the road" and anyone interested in not following US law should not contact our firm or work with us.
Another issue in risk management is the decision a family office makes with respect to what will be the true profit center of your business. Is your business driven by hedging strategies or by speculation? Do you have transparency and proper quantitative assessment of judgment? Have you undertaken a review of risk management across all divisions and portfolio companies? Have you created an oversight and control group to review risk management decisions? Do you have strong internal controls? Do you have the right team of professionals watching your back, motivated by results? Finally, in the area of executive compensation within the context of a family office, the framework for linking pay to performance provides insight into risk management and whether or not there is a proper alignment of values and transparency at the fund or portfolio company level. Put another way, does a family office reward long-term risk management at the fund and portfolio level? That should be a key driver of any compensation plan. These are the risk management and compensation drivers that our people are working on with our family office partners.
SDG, ESG, SRI and Impact Investing
Our planet faces massive economic, social and environmental challenges. To combat these, the Sustainable Development Goals (SDGs) define global priorities and aspirations for 2030. They represent an unprecedented opportunity to eliminate extreme poverty and put the world on a sustainable path. Governments worldwide have already agreed to these goals. Now it is time for family offices to take action. See, sdgcompass.org
As a multi-family office LP, our firm's core DNA is investing and allocating to ESG, SRI and impact investments that address the most pressing social and environmental challenges as defined by the UN Sustainable Development Goals (SDGs). The SDGs, officially known as Transforming our world: the 2030 Agenda for Sustainable Development, is a set of 17 "Global Goals" with 169 targets contained in paragraph 54 United Nations Resolution A/RES/70/1 of 25 September 2015. The SDGs are built on the Principles popularly known as The Future We Want. The SDGs include targets covering a broad range of sustainable development issues, including ending poverty and hunger, improving health and education, making cities more sustainable, combating climate change, and protecting oceans and forests. Privos will not invest in a transaction or make an allocation that does not involve one of the 17 SDGs.
Privos Capital endorses the United Nations-based Principles for Responsible Investment Initiative (UNPRI) and works with family office LP partners to implement UNPRI’s infamous Six Principles for Responsible investment, which were devised by the investment community. We work with our partners to design bespoke, long term programs to implement UNPRI principles across our partners core holdings. We are proud members of US SIF act active at all major SDG, ESG and Sustainability investor conferences.
The 17 SDGs are as follows:
- No Poverty - End poverty in all its forms everywhere
- Extreme poverty has been cut by more than half since 1990- however, more than 1 in 5 people live on less than $1.25 a day
- Poverty is more than lack of income or resources- it includes lack of basic services, such as education, hunger, social discrimination and exclusion, and lack of participation in decision making.
- Gender inequality plays a large role in the perpetuation of poverty and its risks; They then face potentially life-threatening risks from early pregnancy, and often lost hopes for an education and a better income.
- Age groups are affected differently when struck with poverty; its most devastating effects are on children, to whom it poses a great threat. It affects their education, health, nutrition, and security. It also negatively affects the emotional and spiritual development of children through the environment it creates.
- Zero Hunger - End hunger, achieve food security, and improve nutrition and promote sustainable agriculture.
- Globally, 1 in 9 people are undernourished, the vast majority of these people live in developing countries
- Agriculture is the single largest employer in the world, providing livelihoods for 40 per cent of today’s global population. It is the largest source of income and jobs for poor rural households. Women comprise on average 43 per cent of the agricultural labor force in developing countries, and over 50 per cent in parts of Asia and Africa, yet they only own 20% of the land.
- Poor nutrition causes nearly half (45 per cent) of deaths in children under five – 3.1 million children each year.
- Good Health and Well-being - Ensure healthy lives and promote well-being for all at all ages.
- Significant strides have been made in increasing life expectancy and reducing some of the common killers associated with child and maternal mortality, and major progress has been made on increasing access to clean water and sanitation, reducing malaria, tuberculosis, polio and the spread of HIV/AIDS.
- However, only half of women in developing countries have received the health care they need, and the need for family planning is increasing exponentially, while the need met is growing slowly - more than 225 million women have an unmet need for contraception.
- An important target is to substantially reduce the number of deaths and illnesses from pollution-related diseases.
- Quality Education - Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.
- Major progress has been made for education access, specifically at the primary school level, for both boys and girls. However, access does not always mean quality of education, or completion of primary school. Currently, 103 million youth worldwide still lack basic literacy skills, and more than 60 per cent of them are women
- Target 1 "By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and Goal-4 effective learning outcomes"- shows the commitment to nondiscriminatory education outcomes
- Gender Equality - Achieve gender equality and empower all women and girls.
- Providing women and girls with equal access to education, health care, decent work, and representation in political and economic decision-making processes will fuel sustainable economies and benefit societies and humanity at large
- While a record 143 countries guaranteed equality between men and women in their Constitutions by 2014, another 52 had not taken this step. In many nations, gender discrimination is still woven through legal and social norms
- Though goal 5 is the gender equality stand-alone goal- the SDG's can only be successful if women are completely integrated into each and every goal
- Clean Water and Sanitation - Ensure availability and sustainable management of water and sanitation for all.
- Affordable and Clean Energy - Ensure access to affordable, reliable, sustainable and modern energy for all.
- Decent Work and Economic Growth - Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
- Industry, Innovation and Infrastructure - Build resilient infrastructure, promote inclusive and sustainable industrialization, resilient infrastructure, promote inclusive and foster innovation.
- Reduced Inequalities - Reduce income inequality within and among countries.
- Sustainable Cities and Communities - Make cities and human settlements inclusive, safe, resilient and sustainable.
- Responsible Consumption and Production - Ensure sustainable consumption and production patterns.
- Climate Action - Take urgent action to combat climate change and its impacts by regulating emissions and promoting developments in renewable energy.
- Life Below Water - Conserve and sustainably use the oceans, seas and marine resources for sustainable development.
- Life on Land - Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertificaiton, and halt and reverse land degradation and halt biodiversity loss.
- Peace, Justice and Strong Institutions - Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.
- Partnerships for the Goals - Strengthen the means of implementation and revitalize the global partnership for sustainable development.
Privos in the News (Recent Media Coverage)