Episode #318: Paul Moffatt
Host: Ryan Tansom
Many entrepreneurs want to diversify their wealth out of their largest asset–their business. But what if you had so much wealth that you needed to diversify out of the public markets into privately held companies?
Today on the podcast, we get a special look into what it’s like to view–and invest in–privately held companies from the perspective of a family office.
A family office is a privately held company that handles investment management and wealth management for a wealthy family, generally one with over $100 million in investable assets, with the goal being to effectively grow and transfer wealth across generations. The company’s financial capital is the family’s own wealth. (Wikipedia)
In this episode, Paul Moffatt is on the show and shares with us how the family office he works for, Encore One, is structured, why they buy privately held companies, their approach, and what they do with them over time.
Encore One is over twenty years old and focuses on preserving the long-term legacy of their portfolio companies versus buying, gutting, and selling. In this episode, you will learn how Encore One reinvests the cash from their portfolio companies, how they make money, and why they have found their success in long-term holds (ten years and older). One thing Paul really leans into is how important it is to be aligned with their seller and management team on the future direction of the business.
What you will learn:
✔ Why family offices choose to invest in privately held companies.
✔ The structure of Encore One and how their division of the family office interacts with the other divisions of the family office.
✔ Why Encore One reinvests all the cash flow from their portfolio companies.
✔ Encore One’s long-term hold philosophy and why they prefer to keep their companies as long as it makes financial sense.
✔ How many businesses Encore One plans to acquire each year and why.
✔ How Encore One typically structures their deals and why it aligns so well with many business owners.
✔ How Encore One views and treats the management team of the companies they buy.
✔ What the experience is like being owned by a family office.
✔ How Encore One trusts are set up and how they create wealth for their stakeholders.
There are a ton of different options out there. Is a family office a good exit strategy for you? How can it help perpetuate your legacy? How can a family office ensure your happiness? How do you know if a family office is right for you?
Links And Resources:
Paul Moffatt, email: Paul.Moffatt@www.encoreone.com
Paul Moffatt, phone: 952-656-4539
Paul Moffatt, LinkedIn
As Director of Business Development for Encore One, Paul is responsible for sourcing and evaluating potential investments, structuring, and negotiating transactions, and working with portfolio companies. Prior to joining in 2017, Paul enjoyed a successful 16-year career in commercial banking, most recently as a Vice President in the Twin Cities Commercial Banking Group at U.S. Bank serving the banking and broad credit needs of the middle market. Paul lives in St Paul, MN with his wife, two boys and a golden-doodle. Paul enjoys working out at his neighborhood gym and family time; as well as non-fiction, volunteering and golf when he can get those in.