The Coveted Family-Office List You Don’t Want to Be On

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When Kate Sackas was fundraising for FocusGrowth Asset Management, a private-credit firm focused on the cannabis industry that has deployed over $1 billion, family offices were among her best investors. She always wanted to meet more of them, especially in person.

Sackas was wary of conferences that promised attendees access to family offices, but after hearing positive things about one in particular and doing some due diligence, she decided to take a chance. She paid her fee, and then the conference organizer shared an unsettling list of attending family offices.

“Half the names on there were from my little black book,” Sackas said.

Based on her direct experience with some of the investors, the fundraiser “knew immediately” that the conference wouldn’t be worth the time and cost. She asked the organizer for her money back, and they returned it. Sackas didn't want to publicly reveal the conference because the organizer might have used her feedback to improve it. She doesn’t hesitate to tell her peers about it, though.

Raising money from investors is a tough business but more neighborly than one might think. Sackas happily recounts her conference experiences and more in a private WhatsApp group with over 100 other investor relations and fundraising professionals working for investment firms big and small, spanning asset classes and strategies. 

In the same group’s chats, family offices are an increasingly common topic, and instead of answering the same questions again and again, Sackas decided to do something unusual: share her closely held little black book of family offices that never seem to allocate, should be approached cautiously, or are flat-out "fake." She also invited everyone to suggest additions and annotations.

Today, Sackas’s slowly growing, crowdsourced list includes 34 people, the family office or organization they are affiliated with, and notes she’s deemed helpful. About 25 fundraisers have suggested additions or changes, but only Sackas can edit it. Modus has reviewed a recent version of the list, which includes at least seven people publicly listed as speakers, panelists or attendees at family-office conferences.

People are added to the list for different reasons. Several are noted as friendly, but after years of engagement, fundraisers say they never seem seriously interested in investing with them or are active at all. Others may have a family office or invest for one, but they ask fundraisers for introductions and more support for their own endeavors. While the list is primarily a resource to help fundraisers determine how to spend their time and money with family offices, it can also help keep them safe. Two separate men on the list have been noted as a “creep,” and the entries about them suggest women avoid them.

“Obviously, if anybody reviews [the list] and they've had a different experience, I'm more than happy to remove them or provide additional information in the notes. It would be great to be proven wrong,” Sackas said. She’s “not trying to make an ultimate blacklist of people that you should shun. It's something that they can use at like their own discretion; read through the notes and proceed with caution or, you know, they can choose not to do that. It's totally up to them.”

Sackas is open to sharing the list directly with other investor relations and fundraising professionals.

Every fundraiser keeps their own list—or CRM full of rich dossiers—of investors they highly prize or have determined aren’t worth spending time on (or avoiding entirely). But a collective effort across organizations isn't the norm.

“It is incredibly helpful to be part of a community where you can ask IR peers if they have had an experience with a questionable family office. More often than not, there are several responses from folks who verify the group is a ‘fake family office’ based on a variety of signals: doesn't actually have capital to invest, wants free co-investment without making a fund investment, asks the IR person for 4-5 LP references/intros, asks the IR to pay $$ for introductions to investors via an event or virtually,” Natasha Azar, vice president of investor relations at OMX Ventures, wrote to Modus.

Azar, who is in the same WhatsApp group where Sackas shared her list of family offices, has also swapped notes with colleagues about conferences and events that appear to have unwanted family offices on their attendee lists. “To me, this is essentially swindling GPs when a conference organizer charges $30K+ to meet with fake family offices that aren't investing/don't have capital to invest/their intentions are unclear,” she added. 

Family offices are often private by design, making them far more opaque than other investors. (Some institutional investors publicly share their mandates.) Many businesses, such as S&P Global’s With Intelligence and Dakota, collect contact information and mandate details about family offices. Fundraisers said some of those platforms are a helpful start for engaging offices, but a gulf remains between having that information and building the relationship needed to lead to an investment. Sackas's list is just one more filter fundraisers can use to narrow their attention and build relationships.

“I think any random person, or someone that claims to be some sort of family-office guru, or has a list of people that they can sell you—that it's not an actual [managed] database for purchase. It’s most likely a scam or a complete waste of money. If someone does have a real relationship with a family office, and they want to keep that relationship, the last thing that they're going to do is offer to sell a list. That family office is never going to talk to them again—I mean, ever again,” Sackas said.

Fundraisers share information sparingly with each other, and almost always with permission, before making an introduction, she said.

Face-to-face meetings are the best way to build relationships quickly, but they are also the most time-consuming. A little information—such as a short list of family offices to avoid—could help a fundraiser choose which events to attend, and the difference between finding the right investor and closing a round.

“You want to spend time with every prospect. You want to answer all their questions. You want to do the work. But there are so many people out there to spend time with, and that's why marketers start talking,” Erin McStravick, a managing director and the head of investor relations at NovaQuest Capital Management, which invests in biopharmaceuticals and animal health, said. A family office might not be fake, but “maybe they don't have money over the next few years. Be mindful of that and, you know, maybe not spend all of your effort chasing that one person that might not have the capital.” 

In a perfect world, Sackas said her list of family offices red-flagged for other fundraisers would never grow. It probably will, as she and others come across them.

“If you're a real family office, then you know you are, and you have nothing to worry about. It's not a witch hunt. We're not going to stop speaking to you, blackball you, or whatever. But the industry is small, people talk, and we are aware [of fakers], or at the very least, there are definitely people that we’re skeptical of,” Sackas said.

“Fundraising is hard enough. Trying to figure out who's real, who's fake? Sifting through people attending an event? Why not have it as a reference point and a resource?” Sackas said about her list. “I have no problem, no issue sharing that.”

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