Here are some key quotes from my latest podcast with Frank Byrd, Founder & CEO of Fielder Capital Group, talking about outsourced family offices, private wealth management and the transition from hedge funds:

“I saw that demand for hedge fund investments was going down. And meanwhile, the supply kept going up.”

“Unlike the hedge fund business, if I walk into a room full of private wealth professionals, I believe, largely from my background as an institutional capital allocator, that I had a significant advantage.”

“I’m not bearish on hedge fund managers, especially individual managers, I think the hedge fund business will continue to be a fantastic business for very talented capital allocators. And either those that are doing something that’s very niche, or they’re just honestly in the top 1% of what they do, even if it’s not that much of a niche, like long/short equity.”

“There’s a real dearth of talent in this business amongst the very young skill set, meaning the young demographic. So I tell young professionals, young business school students that I think the private wealth business is a underappreciated path career path.”

“I believe that for people who are used to working among champion athletes that are incredibly talented and incredibly motivated, when you step out of the hedge fund business and go into different industries, it’s surprising.”

“I think the next 10 years, we’re going to see a fantastic shift of talent from the hedge fund industry into the private wealth industry. And that’s going to bring me more competitors. But I’ll enjoy seeing these old colleagues again.”

“The compliance and operational [aspects] of running separate accounts, I perceive it as more complex, but it is also the reason that clients choose us, candidly.”

“When the client knows that the only person that we’re getting paid by is them to advise them on their account, if we recommend a particular partnership or a particular fund or strategy, they know we don’t make a nickel more than just telling them to roll T-bills.”

“You want to align yourself with [an advisor] that has a similar philosophy, not just on how the money’s managed. But tax planning, for example. Some people want to get right up to the line and stay within the law, but get right up to the line. Other people want to get nowhere near the line. And life’s too short.”

“I genuinely believe that the fee only private wealth or multifamily office business, whatever you want to call it, is where the hedge fund business was in the 1990s.”