Private Markets Talent Hunt: Navigating Adverse Selection in Wealth Management

Peter Lacaillade, on Invest Like the Best 437, highlights how wealth management faces adverse selection risks as top venture and buyout managers are oversubscribed. Multi-family offices need tax, estate, and investment pros to compete with traditional and substantially larger institutional LPs. While university endowments are under scrutiny, Sovereign wealth funds may fill gaps as endowments pullback, but CFIUS and outbound rules may prevent the pargeting by the sovereigns.

Accordingly, multi-family offices have an opportunity to step up and fight for access to quality alts. For family offices and emerging managers, structuring private funds and co-investments requires regulatory finesse to avoid pitfalls. SEC compliance, tax strategies, and LPAs must align to attract quality LPs and fortify managers against SEC scrutiny. But how do multi-family offices get access to quality managers? For their part, multi-family office managers can use pooled draw-down structures to stroke checks mimicking how traditional and larger LPs invest. The goal, minimize adverse selection and compete for quality funds.

Sabal Law PLLC leverages Big Law and SEC experience to guide GPs and LPs in private equity and venture capital. We craft strategies to navigate adverse selection and compliance, with alternative fee arrangements to support cash-strapped founders and non-U.S. managers seeking ERA status. Schedule a Consultation to build a top-tier private markets strategy!