Ted Cronin, Founding Partner & Chief Investment Officer, Manchester Capital Management LLC, discusses what real estate investments provide a consistent revenue stream and wealth transfer advantages. Cronin is a speaker at the IFG Wealth Management Forum 2014.

1. April 28-29, 2014, The Ritz-Carlton, Phoenix, AZ
www.ifgwealthmanagement.com
How Wealthy Families
Should Invest in
Real Estate
FOR IMMEDIATE RELEASE
a small fee, after which we also typically
manage the property.
“The “Wealthy families investing in real estate
should purchase properties directly, in their own
name, with a single-purpose vehicle,” advised
Ted Cronin, Founding Partner & Chief Investment
Officer, Manchester Capital Management LLC.
Having a business model that is annuity rather
than transaction based means we try to select
properties that can generate good results yearafter-year and are suitable for intergenerational wealth transfer.
A speaker at the IFG Wealth Management
Forum 2014, in Phoenix, Arizona, April 28-29,
Cronin currently ranks No. 27 on Barron’s annual
listing of America’s top 100 independent financial
advisors. He is one of very few to have received
the recognition for seven consecutive years,
since the ranking system was set up.
What types of properties do you look for?
Cronin added: “Real estate can be a very
rewarding alternative to bonds, with wealth
transfer advantages that conventional
marketable securities do not have.”
How can real estate add value to a family
wealth portfolio? How should families invest in
this asset class?
Families have three ways of owning real estate
directly. Through a real estate investment fund,
which has many layers of fees and fluctuates
with the markets as they trade like equities.
A second route could be a real estate
partnership. These often have a lock-up of
around seven years, higher manager fees and
are illiquid. The biggest problem with this route is
that the manager may want to cash out at the
end of the term. As most families want to keep
properties for multiple generations, this short
timeframe is not suitable.
A third option, what we do, is talk to the family to
understand what kind of real estate they want to
own and where, and go out to find properties
with those qualities. When we find a building with
good financial prospects and the family agrees
the price is right, we undertake the purchase for
In real estate, the price paid going in dictates
the outcome of the investment. You have to
purchase the property at the right price and in a
good location. Using downtown San Francisco
as an example, its economy may rise and fall,
but it is unlikely to become a Detroit. Properties
where the owner may be suffering some
financial distress, thus selling at a low value, are
attractive, as well as properties that have not
been managed well, as some improvements to
the tenant agreements and upgrades to the
building could generate the right kind of
revenue.
What are the most important decisions that
wealthy families need to make? Why should
they
focus
on
big-picture
wealth
management?
The least important decision they will make is
which individual securities to own. Whether they
choose Merck or Johnson & Johnson stocks, it
will not make a big difference in the financial
outcome of their portfolio. The asset allocation
decisions, whether to invest in US stocks,
foreign stocks, bonds, cash or hedge funds will
make a bigger impact on the overall
performance of the portfolio. What is the
purpose of the money? Is the portfolio
structured to accommodate the family goals?
What is the family’s appetite and capacity for
risk? There are many policy decisions that
impact wealth preservation. Families need to
avoid the giant pitfalls.
Interview with Ted Cronin,
Founding Partner & Chief
Investment Officer,
Manchester Capital
Management LLC
Ted Cronin of Manchester
Capital Management LLC
discusses what real estate
investments provide a
consistent revenue stream
and wealth transfer
advantages. Cronin is a
speaker at the IFG Wealth
Management Forum 2014.

2. April 28-29, 2014, The Ritz-Carlton, Phoenix, AZ
www.ifgwealthmanagement.com
Salpi Balian
Press Manager—IFG
pressifg@ifgemea.com
For more information: pressifg@ifgemea.com
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