“While it is important to preserve wealth, it is equally important to preserve one’s reputation, and there is some correlation between the two.”
Alex Duff is the Principal at Alexander Advisors. He is an advisor and investor to a number of growth companies and investment funds. He is also a Limited Partner in a variety of investment funds. He helps companies with strategy and business development and works with funds to connect them with investors. Alex even serves on the Board of a family office based in San Francisco.
Q1. Tell us your journey, how did you go from studying History at Duke to being the Principal at Alexander Advisors?
I have always been fascinated by both the financial markets and history. Duke did not have an undergraduate business program so I majored in history, though I did make sure to take classes in corporate finance, accounting, and marketing. During my time at Duke, I co-founded a few businesses, including one called Campus Enterprises, https://campusenterprises.com, that is still operating 25 years later! Starting a company during college definitely planted an entrepreneurial seed. From that time on, I knew that I wanted to be involved with startups and to have my own business someday.
In 2009, I started Alexander Advisors, which is a blend of my post-college work experiences. I started at Morgan Stanley in investment banking, then I moved to the principal side at Fremont Group, the Bechtel Family’s investment office in San Francisco. From there I had operating roles in multiple Fremont portfolio companies.
Q2. You were the EVP of PIX System and on the Board of OnAir and at the same time. How did you juggle work?
That’s a particularly good question as all of the OnAir Board meetings were in Europe, so I had quite a bit of travel. Soon after the Board appointment, though prior to joining PIX, I told the CEO of Fremont that I was excited for the OnAir Board role but that my next employer might not look too kindly on all the time overseas for another company’s board meetings. He said, “I think that a future employer would be foolish not to recognize how valuable that experience might be for both you and them.” As it turns out he was also the Chairman of PIX, so that facilitated the dual responsibilities!
During my trips to Europe for OnAir, I would come back to the hotel after dinner and then begin my PIX work well into the early morning hours. There was the occasional synergy between the two. Once I had an OnAir Board meeting in Milan, then on the same day flew to London to meet with executives at Pinewood Studios, where the James Bond movies were filmed.
Q3. How did you structure a successful 3-way cross-border merger with Airbus & SITA to create OnAir?
It was a fascinating experience, though definitely an arduous one. The whole process took over a year, with countless phone calls, travel, and meetings. We could have used Zoom back then! There were some pieces of good news, however, the first being that most of our meetings were in Paris, a city that had direct flights from all three companies’ headquarters. The second is that the company I was CFO of at the time, Tenzing Communications, counted Airbus as our largest investor. This certainly helped our side during negotiations since Airbus was by far the largest company at the table.
Q4. How did your past job as the CFO of Tenzing influence your current approach towards working with family offices?
Tenzing was the first investment we made at Fremont, and there were multiple other family offices that were also investors. When I moved from being an investor in Tenzing to being the CFO, the nature of my interactions with the company’s investors changed. However, it became clear that this was mostly a positive for all of us. I had a good understanding of the positions and needs of both sides of the table.
I think operating experience is incredibly valuable for investors. Having multiple perspectives is beneficial to understanding the nuances that nearly always surface in the investment world. Years later, I am still on various sides of the table since I am both a client of and an investor in nearly all of my clients. I also invest alongside family offices and in some cases, some of our mutual investments might be a client of mine.
Q5. What is your investment thesis? How has it evolved over time?
I try to keep it simple. Identify an excellent team that has a unique and defensible approach in a promising market. I think that approach will work whether one is considering an investment in a company or considering an investment in a manager. Of course, one critical component of an excellent team is the calibre of the people, not just credentials through personal attributes.
Q6. What mistakes should family offices avoid in order to preserve long-term wealth? How do you help them with this?
While it is important to preserve wealth, it is equally important to preserve one’s reputation, and there is some correlation between the two. Paraphrasing Warren Buffett, forgetting that there are no “called strikes” in investing would definitely be a mistake to avoid. Families should not feel pressure to invest, they have the ability to wait for the right pitch.
I view my family office-facing roles as, quite simply, to use good judgment and help ensure that the groups I’m involved with are teams of terrific investors who are also rock-solid individuals.
Q7. How do you think family offices will evolve in the coming years?
There is a massive generational shift happening that I believe will only accelerate, and it is likely that the next generation of decision-makers will have a different perspective than the current decision makers. ESG and Crypto are amongst the potential beneficiaries of this shift. It’s also interesting to see the rise of more multi-family offices in recent years; I think that trend will continue.
Q8. Could you tell us about Alexander Advisors?
My business is identifying what I believe to be promising investment opportunities, both companies and funds, to then personally invest in them. I also help some of these groups as clients to grow their businesses. My work ranges from helping companies with strategy and business development to working with funds to connect them with investors. I am an agent of a broker-dealer, Emerson Equity LLC, for the fundraising aspects of what I do. I am also on the Board of a family office in San Francisco, where my role is idea generation and information exchange, although I do not vote on specific investments.
The majority of my clients are people I have known well for years although I have a few clients that I was introduced to through another person whom I trust implicitly. I am incredibly careful with whom I associate, since when I connect a client with a contact of mine, I’m effectively lending out both my reputation and my credibility.
Q9. If you had to allocate your personal hypothetical $100M portfolio, how would you do it?
I would allocate a significant percentage of the illiquid portion to venture capital funds, with a smaller percentage to private equity funds. Carve out an even smaller percentage for more speculative pursuits such as crypto or very early-stage startup investments. For the liquid side, I would favor ETFs and a few individual names. Lastly, I would reserve cash for other opportunities and for sleeping well at night!
Q10. Who was an early mentor that believed in you even before you believed in yourself?
An early mentor to me was Lew Lehrman. Lew gave me a sense of confidence in myself and he has also provided me with invaluable advice over the years. Lew is an amazing person. He helped build Rite-Aid and is a brilliant investor, historian, and author who was awarded the National Humanities Medal. I had the incredibly good fortune of getting to know him well since his son Thomas is my closest friend from Duke.
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