JAB Is an Expensive Family Office
Also Starbucks governance, BofA hours, X forum shopping and Ivy League sports.
Let’s say you’re rich. Like really quite rich, billions of dollars, money that you inherited because your great-great-great-grandfather founded a big chemicals business. You will never need to work, and don’t. But there is the question of how you should invest your money. Your choices include, in roughly ascending order of fanciness:
Which will get you the best performance? Well! There is pretty robust evidence that index investing is good and cheap. On the other hand, those professionals that you’d hire to run your family office, they are probably also pretty good. You hired them from fancy investment firms. They can make investments that are suited to your risk appetite, they can hedge against risks and try to get you good performance in all markets, they can buy stuff — whole companies! hot tech startups! over-the-counter derivatives! — that you can’t get on the Vanguard website. With that broad range of opportunities, and their specialized skills, maybe they will outperform for you.
