Foley & Lardner LLP partner Nathan Imfeld and senior counsel Nicholas Chamis discussed investing in assets that combine financial returns with shared family interested in The Family Office Professional article, “Beyond Financial Returns: Investments That Unite a Family.”
Imfeld and Chamis noted that family offices are increasingly exploring alternative investment opportunities, including sports investments set outside of the major professional leagues. Stemming in part from the limited availability of big-four teams, as well as the potential for sports to foster a sense of community across generations, the attorneys also highlighted that these types of investments can present considerable risks.
“All these are highly illiquid private investments that have a very, very high risk of not performing the same as more typical liquid investments,” Imfeld stated. “You want to be really sure that you’re going to get the alignment and engagement that you expect, because you’re paying for it by taking the risk of lower investment performance.”
Chamis added that families need to understand and think of themselves “more as a shareholder than a controlling owner.”
“There needs to be a clear plan ahead of time for how you’re going to look at investments, why you are looking at investments that have non-financial components to what you’re investing, what those are and what, kind of, the collective risk tolerance is – and how to assess that,” Imfeld explained.
