Tiho is a Global Citizen & Investor, and today runs the multifamily office, The Atlas Investor on behalf of his family and other ultra high net worth families and individuals.

I've been fortunate to build a friendship with Tiho since connecting last year and always enjoy our multi-hour conversations about the state of the world, investment opportunities and challenging each other to see things from different perspectives. Tiho has a mind like no other person I've met and it's a privilege to listen and learn to him whenever I'm given the opportunity.

To hear Tiho's first appearance on the podcast, please visit: Tiho Brkan – Global Deal Flow for Family Office Investors.

Standout Quotes:

• "Is Cash going to be King or is cash going to be trash?" - [Tiho]
• "While it's easy to make money today and everything seems to be working, the question for very smart investors is to anticipate what's around the corner" - [Tiho]
• "If you think about a Real Estate cycle, you have 4 stages; Early-stage, mid-cycle, late-stage, and downturn... in Early-stage, you want to be in equity as much as possible" - [Tiho]
• "We don't do deals with any developer that doesn't have more than one exit strategy" - [Tiho]
• "If a senior lender is doing 37 million, talk to them, ask them about the due diligence because they're putting far more money than you are and they've done it all" - [Tiho]
• "The way that you diversify your portfolio, you can also diversify your life" - [Tiho]
• "Stick around very experienced people who have been around for a long time, who have survived the cycles... Stick with a talented group of people who have a low personnel turnover" - [Tiho]
• "Negotiate... Negotiate... Negotiate" - [Tiho]

Key Takeaways:

• Mike's previous episode with Tiho Brkan is one of the most downloaded episodes, and by popular demand, he had to bring him for a 2nd episode.
• Tiho shares that a lot of investors in this period want to make a lot of money as quickly as possible, as this time is not very suitable for long-term investment.
• He explains the reasons why this recession has been the worst in a long time, but this does not reflect in some assets and certain locations.
• In normal valuation, reprisals happen where you hold cash which gives you optionality and the ability to be selective, but where money supply around the world is increasing at a rapid speed, is cash going to be King or is cash going to be trash?
• Tiho explains that as a contrarian investor, you ride a certain wave until valuations become extreme for you, understanding that high valuations today entail future disappointing returns and so rather, you go and look for relative value elsewhere.
• Family offices don't have to be restricted to one type of asset, they have an 'Open Mandate' and Tiho describes the various opportunities available for family offices. Most investors are asking, 'how much money can I make by next Monday?' while he is asking 'How do we only lose 20% rather than 50% in the upcoming downturn?'
• The capital stack' and 'Mezzanine debt': There are 3 Real Estate strategies which are Core Real Estate, Value add Real Estate or Opportunistic Real Estate. Mezzanine debt is most commonly a strategy seen in opportunistic Real Estate investment. Mezzanine debt exposure is the most versatile in all 4 stages of the Real-estate cycle(early, mid, late, and downturn). With Mezzanine debt, you can get up to 15% returns per annum.
• Tiho's due diligence process before investing: First, the deal must be 'shovel ready' meaning construction starts immediately. Next, note the purpose or theme and planning of the project, location of the project, the track record of the borrower, feasibility studies, the general contractor or quantity surveyor, Securities, and the Exit Strategy.
• What is the Monitoring process? This involves Weekly and fortnightly communication to get updates on the project. it may also involve site visits by you or a Real Estate expert, and construction status updates.
• Discussing Residence Planning perspective: What is the purpose that we're trying to accomplish here?
• The OECD tax model: This is divided into 4 segments of how income is taxed. First is the "No Income Tax", second is "Territorial Tax". "Residence-based Taxation" is third. Last is "Citizenship Based Taxation".
• An important investing lesson: Stick around very experienced people who have been around for a long time, who have survived the cycles. Stick with a talented group of people who have a low personnel turnover.
• Everything is negotiable in the world of finance.

Episode Timeline:

• [00:50] Introducing 2nd-time guest "Tiho Brkan", by popular demand.
• [02:30] From your perspective, what have you seen evolve over the last few months from this pandemic?
• [09:03] Are Contrarian investors nowadays taking advantage of the increased supply of money or sitting on their hands?
• [13:52] Discussing the impact of the increase in money supply on preferences regarding the duration of family investments.
• [22:38] 'The Capital Stack' and 'Mezzanine debt' in Real Estate projects.
• [35:03] Tiho describes in critical detail, his due diligence process before investing in a deal.
• [46:00] The 'Monitoring Process'
• [52:50] Are there advantages to the double taxation agreement in a cross-border environment that investors should be thinking about?
• [57:26] The OECD tax model
• [01:05:10] An investing lesson to his kids

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Tiho Brkan.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• The Atlas Investor — Changing the way investors diversify into alternative assets
• Tiho Brkan (@TihoBrkan) / Twitter

Fred Mouawad is described often in the media as a billionaire diamond owner but has also accomplished countless entrepreneurial ventures outside of the family business and offers some key advice on stewarding the next generation.

Standout Quotes

• “We have the inventory; we have the expertise. If we create masterpieces and truly craft extraordinary and position the brand at the very top, then we would be able to build a very niche business. That would stand in the marketplace and have a very clear image.” – Fred Mouawad [12:29]
• “It was interesting to see how we had to reinvent our business and reposition it based on where we thought the world was moving towards. It was an exercise of not necessarily innovation but adaptation and being able to forecast how the markets are going to change over the long run and how us ourselves should prepare for that change.” - Fred Mouawad [14:29]
• “Our responsibility was to guard that heritage. That’s why we call it co-guardians to look after it and start thinking long-term because our job is to look after it for only a certain period of time. It’s a transition from generation to generation.” - Fred Mouawad [24:14]
• “All of the day-to-day is done by professionals. We have a CO for the group, he’s a general manager, for the entire operation. Why did we come up with that model? We came up with this model because we did not want to start blaming each other for executional problems.” - Fred Mouawad [27:16]
• “I think it’s all about preparing the next generation to be the right stewards for the organization and how do you get there? You get there by exposing them to the business, by having them get richer with experience. By exposing them to different elements in the business and outside the business.” - Fred Mouawad [36:26]
• “The best investment I have ever made was investing in myself, investing in my education, and having the courage to gain new experiences. Always being an avid learner. This is what I find the most satisfying, gratifying, and what enables me to do what I do. It’s investing in knowledge and experience and trying to share that with your team.” - Fred Mouawad [50:11]
• “The most important thing that I would want my children to understand is that life is a journey and life requires that they take responsibility. They should keep on stretching themselves by learning, having the courage to try new things, by figuring out how to make the lives of other people better. How can they make a positive impact and how can they always behave based on core values that meet high ethical standards.” - Fred Mouawad [58:43]

Key Takeaways

• The incredible and impactful story of the Mouawad family business
• How standardizing a brand image benefits the scalability of a business
• Mouawad’s mission to craft the extraordinary
• How to prepare the next generation of a successful multi-generational business
• What co-guardianship can mean for a family and the business they run
• Why building relationships with capable people leads to scalable businesses
• How your best investment may be investing in yourself
• Instilling in the future generation the skills to make a positive impact and maintain high ethical standards

Episode Timeline

[1:58] The background of Mouawad’s generational success
[8:01] Modern day Mouawad jewelry business and what it represents
[17:38] High-end masterpieces and being recognized for Guinness World Records
[20:58] The value in business of natural vs synthetic diamonds
[22:39] Preparing the fifth generation of the Mouawad family business
[25:20] The idea of co-guardianship when running a multi-generational business
[29:25] Shaping the next generation for business success
[35:43] Teaching the skills to have another successful generation of Mouawad
[39:26] Formation of family guidelines as family business becomes a family enterprise
[42:27] Fred Mouawad’s entrepreneurial successes
[49:58] What Fred’s best investment was
[51:11] What it means to be a self-described global citizen
[52:47] How to effectively raise motivated children in wealth
[55:35] The transition from full control to family business co-guardianship
[58:24] Fred’s focus on allowing his children to have a positive impact in their life’s journey

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter at https://www.businessoffamily.net/newsletter

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Fred Mouawad.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Magnificent Jewelry and Watches | Mouawad
• Fred Mouawad | Official Website
• Fred Mouawad - Wikipedia
• Forbes Interview with Fred and Pascal Mouawad - YouTube
• Mouawad Miss Universe Crown 2019 - YouTube
• Mouawad & Victoria's Secret | Mouawad — A COLLABORATION TOWARD DARING EXCELLENCE AND BEAUTY
• Mouawad Diamond Impact Fund | Creating value by improving the lives of underprivileged communities in diamond-producing countries to honor the journey of billions of years it takes to form and discover a diamond crystal.
• Synergia One Group of Companies

Tiho is known to visit up to 20 countries per year, all the while observing global economic trends, purchasing offshore real estate and executing investments on behalf of his clients.

Standout Quotes:

• “The margins in luxury real estate can be insanely profitable as long as you know what you’re doing and as long as you choose the right deal.” - Tiho Brkan [21:27]
• “Asian millennials are now becoming the most important demographic for the whole global economy.” - Tiho Brkan [35:30]
• “The beautiful thing about mezzanine debt is that it has equity-like returns and bond-like downside protection or margin of safety, and that’s why we like it. ”- Tiho Brkan [42:05]
• “Focus on learning from the right source and really moving the needle on what’s important and what counts.” - Tiho Brkan [1:03:55]

Key Takeaways:

• How to master the blend between an entrepreneur and an investor
• Learning world cultures through travel
• The importance of diversifying your capital into alternative assets as a high net worth individual or family office
• Understanding the global tax scene when investing across the world
• Capital Stack and the difference between senior and mezzanine debt

Episode Timeline:
[1:35] Tiho shares his background both personally and professionally
[4:05] He shares the reason why he travels and how it has changed the way he views the world
[9:02] How Atlas Investor helps investors gain access to extremely attractive private deals plus using the mastermind model with their investors
[13:50] He talks about his clientele and how COVID-19 has affected the investing world
[16:18] The five strategies they use when investing in real estate across the globe
[24:15] The experience of buying and selling luxury real estate
[27:44] He explains how he handles tax when he lives and conducts business globally
[35:12] The macro view, why the Asian millennial will play a big role in the future global economy
[38:37] The advantages of real estate mezzanine debt investment and why real estate investors prefer it over senior debt
[46:49] Tiho explains what they look for when investing in real estate developments
[54:27] How mentors that included his father played a huge part in his success
[1:00:33] He explains the involvement of his family in the business and the importance of learning from the right sources as a younger person

For more episodes go to BusinessOfFamily.net

Sign up for The Business of Family Newsletter at newsletter.mikeboyd.com.au

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Tiho Brkan.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Book: Think and Grow Rich: Napoleon Hill — In the original Think and Grow Rich, published in 1937, Hill draws on stories of Andrew Carnegie, Thomas Edison, Henry Ford, and other millionaires of his generation to illustrate his principles.
• The Atlas Investor — Changing the way investors diversify into alternative assets
• Tiho Brkan (@TihoBrkan) / Twitter

Implementing family governance rules that “protect the business from the family” has worked out well for Fratelli Cosulich who have successfully transitioned and prospered for six generations.

In this episode, we welcome Tim Cosulich, Tim is the sixth generation CEO of Fratelli Cosulich, an Italian shipping group established in 1857. Across more than 160 years, the Cosulich family has seen numerous changes and weathered many challenges. The Group is involved in most aspects of the shipping industry, has a global footprint across 18 countries, more than 1,000 employees and an annual turnover of 1.8bn USD.

Tim explains why the performance of his family business during World War I and World War II cannot be compared with the current pandemic due to the differences in management and time. He talks about the importance of having family values that are translated into the leadership of the family business while still protecting it.

Listen in to learn the process of hiring family members to be part of a generational family business without promoting conflicts of interest. You will also learn the non-meritocratic governance strategy that is good for the overall success of a family business even with its shortcomings.

Key Takeaways:

• Factors that contribute to the success of a family business
• How to keep a valuable relationship between a family business and the founding family
• How to remove the conflict of interest when hiring family members to become part of the business
• The advantage of building an effective leadership style that ensures all family leaders operate as a team
• How to come up with a structure that helps “protect the business from the family”

Standout Quotes:

• “When we select the next generations, it is important that we focus on those who are motivated by similar things and not necessarily by money.”- Tim Cosulich [14:43]
• “I don’t think the business must be run by family members; I think the business must be run by the best people.”- Tim Cosulich [29:13]
• “If you invest in the wrong businesses, you can destroy your business.”- Tim Cosulich [38:22]
• “If I think about my own life and when and where did I really grow and learn things, it’s mostly in my failures, not my successes.”- Tim Cosulich [44:11]

Episode Timeline:

• [0:04] Intro
• [2:10] Tim narrates the resilient history of his family company that has overcome many challenges.
• [5:38] The impact of the Coronavirus on the shipping business and how they’re handling it.
• [7:24] Why leading by example in a family company is a powerful message as opposed to written values.
• [9:11] He explains why his company’s style of governance ensures the company is protected.
• [11:47] How Fratelli Cosulich keeps its principles and relationship with the family.
  
• [15:59] He explains the process they use in hiring family members and how they were able to eliminate unnecessary rules.
• [19:13] The unique leadership structure that helps the business run smoothly.
• [25:30] The strengths and weaknesses of a non-meritocratic system of leadership that is exercised at Fratelli Cosulich.
• [28:37] Tim paints a possible scenario that would occur if future generations don’t want any involvement with the family business.
• [30:44] Why Fratelli Cosulich has two sets of founders- the ones who founded the physical business and the ones who founded a structure to protect the company.
• [36:16] He explains the advantages and disadvantages of the company’s culture of reinvesting with caution.
• [38:40] Why they do not talk about business at home.
• [43:52] Why Tim wishes minor failures and the spirit of learning for his children in the future.

Relevant Links:

• Fratelli Cosulich

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter at newsletter.mikeboyd.com.au

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Tim Cosulich.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

It was Rob who first introduced me to the phrase "The Business of Family" and ignited in me a passion to explore this topic deeply.

The Robson Family approach to structuring their family partnership and stewarding their assets for succeeding generations is some of the best work I've seen in this area. I have no doubt that you'll have many take aways from today's conversation.

Key Takeaways:

• The growth strategies you can employ to sustain and expand your family business
  
• How to apply the two concepts of business of family and family business in your business
• How to make your business a great place to work and entice the family to want to work there
• Learning to let go off your dream for the greater good of future generations
• The importance of putting as much effort in the business of family as the family business

Standout Quotes:

• “We made it a goal to make our business interesting for our children…our children really became great critics of our business and that was pretty tough on the business.”- Rob Robson [16:46]
• “Give as much attention to the business of family as you would to the family business.”- Rob Robson [34:57]
• “Sometimes life isn’t fair but it’s livable and it’s the ability to adapt and change.”- Rob Robson [42:14]

Episode Timeline:
[0:49] Intro
[1:40] He explains how and why he and his wife travel the world sailing 5-7 months a year.
[4:55] He narrates how he and his wife expanded his parent’s grocery business by researching and employing innovations over the years.
[11:01] The two aspects of the business of family and the family business explained.
[14:30] Rob explains how he and his wife made an intentional decision to actively involve their children in their business from a young age.
[16:43] How they made the business an interesting place to work over the last 30 years and how the ownership of the business is distributed across the family.
[19:58] He describes the process of his family counsel partnership and how it works.
[22:47] The four rules of Harvard on the relationship between the family and the family business.
[25:16] The change of generations as time goes by in a family business.
[28:24] Why it is not automatic for a family member to be offered a position in Rob’s business.
[29:04] He explains how they handle the family business’ funding among the family members.
[33:27] How and why they invested in a family business.
[34:55] Lessons you can learn from Rob on how to grow a multigenerational business.
[37:44] He describes his legacy as having put the effort in both the business and the family.
[40:25] Rob shares what he would include in a letter of a life lesson he believes many parents don’t teach their children.

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter at newsletter.mikeboyd.com.au

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Rob Robson.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Book: Family Wealth - Keeping It in the Family: How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations: James E. Hughes Jr. — The landmark book that changed the way exceptional families think about their heritage, their wealth, and their legacy to future generations.