Serving the Rise of Direct Investing for Families
If Knowledge is Power, EQ is King
According to the latest Family Office Guide from EY, the consultant estimated that at least 10,000 family offices exist around the world, more than half of which were established within the last 15 years. During that same time, the number of billionaires nearly tripled, adding more than 1,500 worldwide.
Much of this wealth creation is due to the significant gains generated across both public equities and private capital investments. The combination of record-breaking liquidity in the market, an accommodating IPO market (for profitable companies at least), and aggressive M&A activity by corporations, has allowed many founders, company executives, and their families to convert significant equity value into cash.
To manage this prompt infusion of wealth, families all over the world have begun forming Single Family Offices (SFOs). Structured to meet the needs of each individual family, all SFOs look, feel, and operate quite distinctly from each other. Said another way, if you've seen one family office, you've seen one family office.
Teamwork Makes the Dreamwork
Today, many believe science and technology, alone, will solve the world's problems. But while science can inform us what is possible and technology can increase productivity, neither can be counted on to tell us definitively if our actions are either right or wrong. Whether or not something is good or bad or supports or impedes human flourishing can only be determined by wisdom and empathy to appreciate any unintended consequences. Without wisdom, knowledge, profit and efficiency become ends in and of themselves, leading to an impersonal, transactional society in which people are treated as numbers, not individuals. To avoid this impersonal and transactional approach towards life we must seek to understand human nature, how human relationships work, suffering and death, and most importantly the character of the creator Himself.
So you see, there is knowledge without wisdom. But can you have wisdom without knowledge? No. We believe that there is a different kind of intelligence, emotional intelligence (EQ) that is unquestionably necessary to becoming a wise person. These abilities differ from IQ, which solely measures one's cognitive ability. It is EQ which helps people recognize, understand, and manage their feelings as well as those of others. It is this type of knowledge or “intelligence” that will allow you to appropriately apply what you cognitively know with the discipline, discernment, and discretion to be your best self.
Take What the Defense Gives You
John Maxwell’s famous quote about teamwork is well known in most business circles. What many often overlook is Maxwell’s warning that a vision can quickly become a nightmare if “a big dream” is carried out by a bad team.
Today’s market is dynamic and ever-changing, requiring businesses to always up their game while remaining agile and ready to adapt. Although not everyone agrees on how to stay ahead, there is a consensus that teamwork has never been more critical.
The days of the individual superstar are gone. As the world becomes more interconnected, and technology continues to disrupt the status quo, there is an increasing reliance on others around you, or the "team," to keep up. Teams are developing the vast majority of innovations today at companies such as Google, Uber, Airbnb, and Apple. Put simply, if you want to create something of significance, it generally requires a team. But teams are not easy to assemble or manage. So how can you create a healthy and productive team?
Positive Impact in the World
On a day-to-day basis, investment managers compete against their peers to win deals, raise funds, and attract top talent. While the marketplace has perhaps never been more competitive, one opponent we all share in common is the market itself.
Like any good defensive coordinator in football, the market tends to lull investors to sleep. It does this with bull markets and long periods of economic expansion. Then, when you're least expecting it, the market will dial up a blindside blitz in the form of surprising economic news, geopolitical events, or any other developments that collectively alter investors' views around the trajectory of corporate growth.
If hindsight has taught us anything, it's that it's the "unknown" that take investors by surprise. In 2001, for instance, was the most recognized the runup in stock prices that characterized the dot-com crash, but it was the accounting scandals at Enron, WorldCom, and Tyco that shook investor confidence during this era. Seven years later, it was the opacity of CDOs and investors' inability to recognize or measure the underlying risk in these instruments that eventually triggered the global financial crisis. The broader point is that downturns may seem obvious in hindsight, but they're generally inconspicuous until it's often too late.
Why Trust Matters
In our daily labor, each of us desires to make a positive impact. The Bible references work as soon as it begins "God created..." That’s how important and fundamental our vocations can be to finding fulfillment in our lives. We may not realize it amid the sweat and toil of our individual jobs, but once we’ve created or achieved something of lasting significance little if anything is ever more gratifying. This is simply our way of “imaging” God, whether we realize it or not.
For some, this can mean earning outsized returns; for others, it can mean breaking a record, winning an election, or bootstrapping a business that goes on to become a unicorn. Although each of these accomplishments are all well and good, even triumphs become dangerous when the ultimate objective is the success, in and of itself. Indeed, most will find that the goals we do achieve only provide a fleeting satisfaction and, generally, aren’t nearly as gratifying as we had hoped.
The Weatherford Way
We believe that the depth of our relationships not only make a difference in business, but are among our key differentiators
Jack Welch perhaps said it best when he observed that “trust means confidence.” When these characteristics – be it assurance in yourself or faith in the team behind you – underpin the pursuit of any objective, most discover that no goal or mission is ever too big to be out of reach. We’ve found this to be true whether in business, sports, public service, or in cultivating one’s faith. The catch, however, is that trust is far more difficult to foster and secure than most realize, which is why we don’t pay lip service to it in our efforts to create meaningful relationships.
There is a school of thought that says purpose statements should be aspirational. The problem -- when you look across an industry with more than 7,000 private equity firms, each competing for talent and new deals – is that these statements proclaiming either a firm’s mission or its values all start to sound the same. Yet we at Weatherford Capital are quite different from the more traditional PE fund managers.
With this in mind, in crafting our purpose statement, we chose to focus less on what we want to accomplish and more on what we know to be true, which is simply this: Together, we can accomplish more, making a positive impact on the world.