Forbes is taking its gold-plated brand in a new direction. The Forbes Family Trust says it is planning to leverage its high-profile name and wealth management experience to launch a national multifamily office.
"We see an opportunity to have a national RIA multifamily office brand with the Forbes name," says Scott Gregorchuk, chief executive of Forbes Family Trust. "We are surgically targeting the right advisors and investment advisory firms to join our effort."
Forbes is pursuing both acquisitions and strategic partnerships with an equity stake, Gregorchuk says. "We want to maintain flexibility and find the right teams where there are solutions for both parties."
READY FOR ACTION
The multifamily office is "ready to take action" and begin a national rollout if it finds the right advisor team, according to Gregorchuk. "We're not in a rush, so it could be one month or it could be six months," he says.
Founded in 2009 by the Forbes family as a multifamily office, Forbes Family Trust joined forces with LGL Partners, a Philadelphia-based multifamily office, two years later. LGL is the successor firm to Brooks Capital Group, a family office founded by Brook Lenfest in 2000 to handle his family's investments after it sold Lenfest Communications to cable giant Comcast.
LGL has an equity interest in the Forbes firm; smaller stakes in the company are also owned by Gregorchuk, Chief Investment Officer William Luterman and President Keith M. Bloomfield. Company executives declined to discuss ownership stakes held by members of the Forbes family.
The combined firms, which will be marketed under the Forbes name, have about $1.5 billion in assets, according to Gregorchuk, and serve about 30 families with a staff of 15 advisors.
Yet so far, Forbes Family Trust has attracted little attention. An ADV form filed with regulators late last year said the firm had 10 or fewer clients; in July, Gregorchuk said the combined firm had 30 clients. "They have a gold-plated brand like Rockefeller and Guggenheim, but they haven't done much with it," says one well-connected insider. "I don't see them around much, and I don't know anyone who uses them."
RAMPING UP
That may change, as the multifamily office ramps up its marketing efforts to take advantage of its famous name - best known for the eponymous business magazine that unabashedly extols the virtues of capitalism.
Gregorchuk, who also worked at Goldman Sachs, Morgan Stanley and J.P. Morgan before joining LGL in 2010, says Forbes will offer a full range of family office services - including concierge, bill pay, governance and family education. Whatever the firm feels it can't do in-house it will outsource, he says, adding that the firm hopes to attract wealthy families with between $10million and $100million in investable assets.
While a growing number of RIAs are striving to establish a national presence, no firm has yet realized a true coast-to-coast footprint, or launched a countrywide multifamily office brand.
Yet demand for a national multifamily office does exist, say industry observers - and while the Forbes name is an asset, success will take patience and hard work.
"Three trends are lined up to support a high-quality national multifamily office," says Doug Black, founder of SpringReef Partners, a consulting firm that helps wealthy families evaluate advisors. "There is significant interest in MFOs, and they are gaining share from broker-dealers; single-family offices looking for cost-effective solutions are moving to MFOs; and there is increased demand for outsourced chief investment officers."
Nevertheless, Black cautions, "name recognition doesn't necessarily translate to brand recognition. It does give Forbes the opportunity to leverage the name, which is synonymous with wealth, to build the brand. But the rest will depend on the decisions they make, the partners they choose and the quality of their execution."
BANKING ON A BIG NAME
The Forbes name gives the firm a "huge" advantage in the market, says Brian Hughes, principal of Hughes Growth Strategies, a consulting firm specializing in business development strategies in the ultrahigh-net-worth space.
Forbes also has "a proven wealth management operational leadership team," says Shirl Penney, CEO of Dynasty Financial Partners, the New York-based platform provider. "They have many of the elements in place to be a national independent wealth management brand," says Penney, who worked with Gregorchuk at Citigroup and credited Bloomfield as being an asset. "I think the market is right at this moment in time for national RIA brands to emerge," he adds.
Forbes is hardly the only firm hoping to fill that void. Leading candidates include such major players as Los Angeles-based Aspiriant, New York's Bessemer Trust and Seattle-based Threshold Group. Other rivals include the sizable and well-established multi-family offices owned by large banks - a list that includes GenSpring Family Offices (owned by SunTrust Bank), Abbot Downing (Wells Fargo), U.S. Trust (Bank of America), BNY Mellon Wealth Management, Harris myCFO (BMO Financial Group) and Northern Trust.
Aspiriant, which has more than $7billion in AUM and some 800 clients, has been particularly aggressive over the past several years. The firm acquired Deloitte Investment Advisors in 2010, giving it offices in several big cities in addition to its home base offices in San Francisco and Los Angeles.
And Chief Executive Rob Francais has made clear the firm's national ambitions, saying repeatedly that Aspiriant is on the lookout for wealth managers and family offices that share the firm's vision and equity-sharing culture.
Hughes adds that the Forbes firm, headquartered in Philadelphia with an office in New York, also faces considerable challenges: access to a highly competitive market the firm has yet to even enter, and building a national network.
To succeed, Hughes maintains, Forbes must be willing to wait at least three years before gaining traction. "It's the same whether they grow organically or by acquisitions, where there will be a period of transition," he says. "You have to establish trust and credibility, get referrals and expect to wait a long time before a wealthy client comes on board. They could be successful if they are patient, but if they become impatient and abandon their strategy, they will get in trouble."
Charles Paikert is a senior editor of Financial Planning.
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