Palm Beach Office Forum Report

POST-EVENT REPORT

A summary of the Forum’s content sessions, including key takeaways and attendee polling data, examining investment trends, legacy planning, and innovative strategies to navigate the complexities of family office dynamics. Day Pitney Palm Beach Family Office Forum 2024

DAY PITNEY FORUM HOSTS

R. SCOTT BEACH, CHAIR

JAMES BALLERANO

DANIEL DIAZ LEYVA

TASHA DICKINSON

MANUEL GARCIA-LINARES

SARAH JACOBSON

DARREN WALLACE

CONTENTS

04 05 06 08 10 12 14 16

Keynote Addresses: A Conversation with Governor Jeb Bush

Economic Outlook with Tony Roth

Panel Presentations: Navigating Real Estate Debt in 2024 and Beyond

A NOTE FROM R. SCOTT BEACH

Evolution of LATAM Family Office Planning: Trends and Opportunities Compensation Challenges: Aligning Compensation Arrangements and Governance Structures with Family Objectives Wellness-Driven Legacy Planning: Nurturing Harmonious Continuity Across Generations Beyond the Game: Exploring the Evolution and Trends in Sports Investing Curating Collections of Luxury Goods: Planning for Legacy and Posterity

For more than a decade now, Day Pitney has been convening an elite group of family office principals, executives, investors, and advisors for our annual Palm Beach Family Office Forum. The event offers a unique platform for communicating timely and topical information impacting our clients’ lives and businesses while fostering an ecosystem to access thought leaders, network with peers, and share ideas and opportunities. Our May 2024 Forum was our most dynamic and engaging yet, with a line-up of world-class speakers and over 200 participants representing families from across the US and globally. The theme that evolved out of this year’s Forum was “relationships,” which Governor Bush noted in his opening remarks while discussing the value and importance that he places on relationships in selecting investment partners and vetting management teams of companies in which he invests. As highlighted throughout the program, in terms of relationships, there are no stronger relationships than the bonds within healthy and harmonious families, and among their family members, when they are aligned in promoting and preserving family values and legacy. This report aims to summarize the highlights and primary takeaways from the keynote addresses and panel discussions. It also presents polling data collected from our audience in real time during the presentations. We trust these insights will be useful, and we look forward to seeing you at our future family office programs.

Governor Jeb Bush is the chairman and founding partner of the private equity firm Finback Investment KEYNOTE: A CONVERSATION WITH GOVERNOR JEB BUSH

KEY TAKEAWAYS

• Qualitative due diligence is essential in private equity investing. Ask whether the leader is capable, has integrity, and will rise to the occasion when the going gets tough. Subpar deal outcomes almost always trace back to poor leadership at the top of the company. • There is a massive opportunity to close the skills gap: Too many high school graduates are not college- or career-ready. • Some of the most attractive investment opportunities currently are in health care and in companies providing services in connection with the electrification of the economy. “If you really professionalize your network and focus on it, and if you’re constantly saying, ‘how can I help?’ —rather than what you can do for me—you end up building a really vibrant ecosystem that can help businesses grow.”

Partners. While serving as the 43rd governor of Florida from 1999 through 2007, he cut $20 billion in state taxes and vetoed more than $2.3 billion in earmarks. His administration helped create 1.3 million net new jobs and improved the state’s credit ratings, including achieving the first-ever triple-A bond rating for Florida. Governor Bush has founded three private equity firms and served as a senior advisor to two investment banks. Governor Bush shared insights from his long career in both politics and private equity, reflecting on how his family background instilled in him a commitment to serving others. He emphasized the central role of personal relationships in successful investing and the importance of prioritizing integrity. The governor also shared his perspectives and insights regarding the divisive state of the U.S. political climate and his thoughts on the potential impact on economic and tax policies stemming from the upcoming elections. He addressed a series of broad-ranging questions from the audience touching upon his views of the presidential candidates and foreign affairs, including conflicts in the Middle East and the war in Ukraine.

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KEYNOTE: ECONOMIC OUTLOOK

Tony Roth is chief invest- ment officer for Wilmington Trust Investment Advisors, Inc., the investment advisory arm of Wilmington Trust and

M&T Bank. Roth plays a key role in developing and delivering investment services to wealth, institu- tional, and brokerage clients. He provides strategic direction for the firm’s asset management invest- ment activities including asset allocation, manager research, and portfolio construction. Roth leads the firm’s Investment Committee. Roth explained the primary factors underlying the sustained outperformance of the U.S. economy relative to the rest of the developed world. He emphasized labor market flexibility, capacity for innovation driven by technological advancements, and high fiscal responsiveness in times of economic turmoil. Despite these strengths, Roth highlighted the risks of an excessive debt-to-GDP level, noting that current fiscal deficits are unprecedented in expansionary periods. He said he expected a normalization of inflation and interest rates over the coming year. Roth also discussed the potential impact of AI and technology on productivity and the labor market.

KEY TAKEAWAYS

• The U.S. economy continues to outperform Europe and Japan due to its robust labor market flexibility, technological innovation, and effective fiscal responsiveness during crises. • U.S. fiscal policy is unsustainable, particularly if inflation and interest rates remain higher than expected in the coming years. A combination of entitlement reforms

and tax increases could address the problem, but political will is lacking.

• As has been true of other digital technologies, adoption of AI will be a major driver of U.S. growth, but the hollowing out of middle-income jobs is a concern.

“We have a pretty positive short-term perspective and a much more concerned medium- to long-term perspective … particularly relative to the fiscal deficits that we’re running in this country, which are utterly unsustainable …”

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Navigating Real Estate Debt in 2024 and Beyond

PANEL PARTICIPANTS

KEY TAKEAWAYS

• Accretion Capital founder Eduardo Burillo has over 25 years’ experience in telecom infrastructure, emerging tech, media, finance, and real estate. • Daniel Diaz Leyva (moderator) is the chair of Day Pitney’s Florida real estate practice and chair of the firm’s LATAM practice. • Chris Drew , senior managing director at JLL Capital Markets, leads one of the most active real estate brokerage and advisory business in Florida. • Scott Sherman is founder and principal of real estate investment firm Torose Equities, which is active in urban retail, office, and mixed use. • Eduardo Subervi is director of Real Estate Banking at City National Bank, serving clients ranging from large institutions to local owner operators.

• There is ample liquidity in the marketplace. The cost of debt capital is an obstacle, but buyers and sellers are getting closer to bridging the gap in pricing expectations. • South Florida office is an oversold asset class, partly because institutional investors worry that doing office deals will compromise their ability to raise their next fund. Family offices are more willing to make contrarian bets on office. • Both the living sector (e.g., multi-family housing, student housing, senior housing) and the industrial sector remain hot.

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PANEL SUMMARY

The panel discussed the volatile state of real estate investing, with a focus on opportunities in the Florida market. Panelists explained how market participants are adapting to the “higher for longer” interest rate environment and explored the different positioning of institutional and family office investors. Topics included contrarian opportunities in the office sector, the ongoing strength of retail (such as grocery-anchored shopping centers), and the likelihood that supply constraints will continue to support healthy rents in multi-family housing.

ATTENDEE POLLING DATA

Have you or the clients you advise shifted from traditional to non-traditional debt strategies in recent years? Please select one:

(A) Yes, significantly

25%

(B) Somewhat

38%

Are you or the clients you advise actively pursuing deals in the current market environment? Please select one:

(A) Yes, aggressively

21%

(B) Yes, cautiously

68%

11%

PALM BEACH FAMILY OFFICE FORUM | 7

Evolution of LATAM Family Office Planning: Trends and Opportunities

PANEL PARTICIPANTS

KEY TAKEAWAYS

• Lowry Brescia , associate director at Stonehage Fleming, orchestrates strategic objectives for high- net-worth clients in Latin America and globally. • CEDEM founding president Carlos Dumois has been a director of dozens of family companies across Spain and Latin America. • Osvaldo Garcia is an executive director at J.P. Morgan Private Bank, providing wealth advisory services for the bank’s clients in Latin America. • Day Pitney partner Sarah Jacobson (moderator) represents high-net-worth individuals and families in international estate planning, tax, and trust matters.

• Sophisticated, cross-border planning is more critical than ever, as family members increasingly reside and operate all over the world. • In Latin America, geopolitical risk is a key consideration, as reflected in the notable uptick in outmigration of high-net-worth families, with many moving to Florida. • Some Latin American families are at the forefront of equipping next-generation family members with leadership skills and of adopting family protocols or constitutions to promote family cohesion.

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PANEL SUMMARY

The discussion highlighted the complexities arising from a more global distribution of family members across multiple jurisdictions and the evolving family office governance structures in Latin America. In particular, families are increasingly recognizing that a dictatorial model centered on the family patriarch or matriarch does not position the next generation for success. Although progress is uneven across countries, there are increasing efforts to incorporate younger family members into family office operations and to build more robust governance structures. The panelists also described the growing popularity of U.S.-based dynasty trusts, which allow a family to access the benefits of U.S. structures and courts, while retaining foreign tax treatment.

ATTENDEE POLLING DATA

Which of the following would you rate as the top risk to the long-term wealth of high-net-worth LATAM families? Please select one:

(A) Family disputes and break-up

13%

(B) Political risks and increased taxation

44%

33%

(D) Lack of planning

(E) Poor investment management

How do LATAM families of wealth equip the next generation to understand the broad responsibilities of wealth? Please select all that apply:

(A) We trust in the family environment and education we provide at home

29%

(B) We regularly discuss our wealth and the responsibilities associated with it

36%

PALM BEACH FAMILY OFFICE FORUM | 9

Compensation Challenges: Aligning Compensation Arrangements and Governance Structures with Family Objectives

PANEL PARTICIPANTS

KEY TAKEAWAYS

• R. Scott Beach (moderator) is chair of Day Pitney’s Corporate and Business Law department and chair of the Family Office Practice group. • Hunter Guice , principal consultant at Botoff Consulting, has advised family offices on compensation and benefits for over a decade. • Linda Mack is the premier provider of C-suite retained executive search and strategic human capital consulting solutions to family offices.

• Family offices must approach recruitment strategically and professionally, setting clear performance expectations, documenting compensation metrics in writing, and carefully evaluating cultural fit. • Top talent increasingly expects private equity-like incentives, such as carry participation and co- investment opportunities, especially where the family intends to make direct investments. • Family offices are taking governance more seriously, bringing on better qualified and more highly compensated investment committee members, partly to train and mentor the next generation of family members.

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PANEL SUMMARY

Panelists shared insights into the highly competitive market for family office investment professionals and investment committee members. Families committed to hiring top talent must adopt a strategic approach, demonstrating to candidates an understanding of market norms and a commitment to compensating investment professionals transparently and appropriately. Incentive-based compensation structures such as carry plans and co- investment opportunities must be on the table if a family is to entice and retain the most sophisticated talent. Panelists also discussed the trend toward more formalized governance structures and decision-making processes, as family offices seek to build fully professionalized in-house investment capabilities.

ATTENDEE POLLING DATA

What recruiting challenges has your family office, or those you advise, experienced in the past year? Select all that apply:

(A) Available talent pool

38%

(B) Location of talent

23%

10%

(D) In-office requirements of the firm

10%

(E) Current pay conditions

18%

Which structures does your family, or those you advise, leverage for family governance? Select all that apply:

(A) Advisory Board

18%

(B) Board of Directors

24%

16%

(D) Family Council

16%

(E) Investment Committee

21%

(F) Owner’s Council

PALM BEACH FAMILY OFFICE FORUM | 11

Wellness-Driven Legacy Planning: Nurturing Harmonious Continuity Across Generations

PANEL PARTICIPANTS

KEY TAKEAWAYS

• Charlie Garcia is managing partner of R360, an exclusive peer-to-peer network helping families create lasting legacies beyond traditional wealth. • Matt Savarick (“Coach Matt”) (moderator) is a highly experienced sales and success team leader and a mental and behavioral health advocate. • Adam Tannenbaum , partner and portfolio manager of Tannenbaum Strategic Credit, executes macro- economic theses across public and private credit. • Brian Weiner is founder & CEO of ExCel Global Family Office, an independent family office and business advisory firm.

• Legacy planning should encompass more than financial assets, integrating mental, emotional, and physical wellness to ensure generational longevity. • Effective legacy management requires open communication and adaptability to evolving family dynamics and societal changes. • Philanthropy can serve as a practical vehicle for transmitting values and engaging younger generations in legacy planning. • Storytelling is a strategic tool for imparting enduring values, and strengthening family bonds through family retreats and workshops focused on shared values exploration and identifying common goals.

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PANEL SUMMARY

The panel emphasized that legacy planning should transcend financial inheritance, integrating wellness as a pivotal aspect of transmitting values across generations. Panelists highlighted strategies for addressing psychological health and explored the task of managing delicate family dynamics in the context of wealth transfer. The panel explored practical mechanisms for nurturing continuity and addressing challenges head-on so as to create a more holistic and inclusive approach to legacy planning that honors individual wellness while fostering a sense of shared purpose and continuity across generations.

ATTENDEE POLLING DATA

Which of the following challenges or barriers have you or the clients you advise encountered when attempting to instill family values and promote continuity among generations? Select all that apply:

(A) Generation gap and differing perspectives on family values

21%

(B) Lack of interest or engagement from younger family members

38%

26%

(D) Difficultly in balancing individual aspirations with collective family goals

13%

(E) Logistical challenges / scheduling conflicts in organizing family activities

What key values do you feel that families of wealth wish to pass on to the next generation?

PALM BEACH FAMILY OFFICE FORUM | 13

Beyond the Game: Exploring the Evolution and Trends in Sports Investing

PANEL PARTICIPANTS

KEY TAKEAWAYS

• Lamar Cardinez is a principal of Blue Owl and member of the GP Strategic Capital Investment Team. • Sportsology Group founder Mike Forde advises franchise owners, federations/leagues, and institutional capital across the U.S. and Europe. • Julian Green is SVP of communications and community affairs for the Chicago Cubs, serving as the ballclub’s chief spokesperson. • Dylan Kremer is a managing director at IEQ Capital, an independent wealth management firm and family office with over $25.5B in RAUM.

• Sports investments can be an exceptional source of uncorrelated returns, as illustrated by the growth of franchise valuations even during downturns in equity markets. • Franchises and leagues are looking beyond traditional revenue streams, more effectively leveraging their media assets and exploring international markets, which have been under-monetized historically. • Investing indirectly through funds is an accessible pathway that provides diversification benefits, smoothing fluctuations in individual teams’ on-field performance and resultant revenue generation.

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PANEL SUMMARY

This session delved into the opportunities and challenges in sports investing, explaining how sports can be a uniquely attractive asset class for family offices beyond the obvious “vanity” element. Panelists explained the mechanisms through which investors can gain exposure to sports assets, ranging from indirect investing through funds to becoming a majority franchise owner—though the panel cautioned that breaking into insular league communities is still a significant challenge. The panel also explored the advantages and disadvantages of investment in the top leagues such as Major League Baseball and the NBA compared to less established opportunities such as the National Women’s Soccer League (NWSL).

ATTENDEE POLLING DATA

Are you or any of the clients you advise currently invested in or considering investments in sports-related opportunities? Please select one:

(A) Yes, already invested

75%

(B) Considering it actively

19%

Which of the following specific segments within the sports, media, and entertainment sectors do you believe offer the most promising investment opportunities? Please select one:

(A) Investing in the Big 5 Franchises (NFL, NBA, MLB, NHL, MLS)

33%

(B) Investing in emerging sports franchises/leagues (women’s soccer, volleyball, pickleball, etc.)

13%

(D) Sports technology & analytics and digital media platforms, including e-sports and gaming

53%

PALM BEACH FAMILY OFFICE FORUM | 15

Curating Collections of Luxury Goods: Planning for Legacy and Posterity

PANEL PARTICIPANTS

KEY TAKEAWAYS

• Ken Ahn is president of Hagerty Marketplace and a lifelong car enthusiast. He has deep experience in strategy, finance, and operations. • John Castrucci is national managing director in RSM’s Global Family Office practice, with over 30 years of family office advisory experience. • Destiny Family Office founder Tom Ruggie (moderator) helps clients integrate valuable collectibles as an alternative asset into all aspects of their overall planning. • Independent fine art advisor Ron Varney is an advocate for private clients in navigating the increasingly complex global art market.

• As valuations have escalated, it is more important than ever for collectors to have a plan, stretching from acquisition through to eventual disposition or succession. • Collectors must be realistic about the next generation’s interest in the collection. Either ensure that heirs understand what they will inherit or remove the burden by making a concrete exit plan while the collector is still living. • Because collectibles can be difficult to value, it is imperative to maintain an up-to-date understanding of a collection’s value and how it relates to the family’s broader tax and estate planning.

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PANEL SUMMARY

Once perceived essentially as a “hobby,” collectibles have evolved into a bona fide asset class. The panel explored implications of this shift, with a focus on common pitfalls affecting collectors whose purchases derive from a passion for the category. Panelists emphasized the importance of a disciplined and structured approach to investing in this space. Collectors must conduct genuine due diligence to avoid fakes and must ensure a properly documented sale to guard against future uncertainty around title. They must engage highly qualified advisors to maintain an ongoing understanding of the value of their holdings and secure appropriate insurance coverage. And it is essential for collectors to plan for the future, mindful of how their heirs will be positioned relative to the collection and preserving its legacy.

ATTENDEE POLLING DATA

Which of the following types of luxury collectible are you or the clients you advise most passionate about right now? Please select one:

(A) Fine art and antiques

64%

(B) Vintage automobiles

27%

(D) Jewelry and watches

(E) Sports memorabilia

Which of the following approaches do you feel is most important for balancing personal enjoyment with financial considerations when acquiring or managing luxury collectibles? Please select one:

(A) Setting strict investment criteria

(B) Investing in items with dual aesthetic and investment value

63%

13%

(D) Seeking expert advice from appraisers and dealers

25%

PALM BEACH FAMILY OFFICE FORUM | 17

To learn more about the Day Pitney Palm Beach Family Office Forum, please visit our website.

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