The situation

Renée*, a successful hedge fund principal in her mid-40s, was respected in her field. She was a talented investor with a significant appetite for risk. Like many of her peers, the majority of her wealth was invested in her fund.

The fund had been the sole focus of her career. That is, until she decided to start a commercial real estate business. But with so much of her wealth tied up in her fund, she didn’t have the working capital to buy and sell real estate, pay contractors or cover the other costs of running the business. 

Renée knew she wanted to stay involved and fully invested in her fund, and that she needed access to liquidity to launch her business. But what hadn’t been on her radar was how to protect her personal wealth.

Our approach 

After meeting with Renée, we developed an approach that gave her access to the advice, liquidity and financing she needed, while it helped her protect her investments through diversification. That gave her several advantages, including:

  • Access to liquidity: With her husband, a fellow fund manager, Renée had amassed an impressive art collection. By pledging several valuable artworks, she could open a substantial line of credit to help capitalize her new business.
  • Business advice: Although a stellar fund manager, Renée was new to the conventions and practices of a more traditional business. Our business owners’ advisory group provided her with valuable insights on organizational structure and long-term planning.
  • Commercial credit: Our commercial real estate lending team helped Renée create a financing plan and connected her to the resources of J.P. Morgan’s Investment Bank and Commercial Bank to secure the loans.
  • Personal wealth protection: With most of her wealth concentrated in her hedge fund and real estate businesses, Renée had exposed her personal wealth to oversized risk. A setback for either or both of her businesses could put her wealth at jeopardy. We created a complementary portfolio to offset the hazards of her concentrated positions.
  • Community: Renée knew she wasn’t the first entrepreneur to face these issues. Through our client network, we connected her to other experienced principals, managers and executives. These relationships helped keep her up to date with investment and business trends, and find investors for her real estate venture, too.