Mastering Tax-Advantaged Investing Strategies with Family Offices and Private Markets

The more that we from the investment side and the trust in the state folks and the tax CPAs

can actually get together and work together not only on developing a plan but an execute.

I think it's, I think it's very, very change things and help in long-term both generations.

Welcome to the Wealth Strategy Secrets of the Ultra-Welty Podcast,

where we help entrepreneurs like you exponentially build wealth through passive income

to live a life of freedom and prosperity.

Are you tired of paying too much in taxes, gambling your future on the stock market,

and what to learn about hidden strategies for making your money work for you?

And now your host, Dave Wolcott, serial entrepreneur and author of the best-selling book,

The Holistic Wealth Strategy.

Welcome back to Wealth Strategy Secrets of the Ultra-Welty.

Today's conversation is a masterclass in how sophisticated capital is being deployed

in 2026 and beyond. Through the lens of someone who has lived on the inside of family offices,

institutions, and private markets for decades. My guest is Tom Brackovich of DCA Family Office

and Tom brings a rare blend of experience. He started as an aerospace engineer and entrepreneur

moved into venture capital, built a venture platform inside a multi-billion dollar family office,

advised major pension plans and sovereign wealth funds, and now helps ultra-high net worth

family's structured tax advantage, private market investing. In this episode, we get very practical

about how family offices are thinking about portfolio construction and a volatile macro environment.

Where private markets are still creating true alpha, and where they can quietly create tax drag.

The difference between private credit and what Tom calls alternative yield,

and what a real deal diligence funnel looks like when you're reviewing over a thousand deals

a year and why the best investors are willing to walk away. And lastly, one of the most important

insights of all, most wealthy families have world-class advisors, but those advisors often

operate in silos. Tom explains why integrating investments and tax and trust in a state is where

the real compounding advantage happens. If you've ever wondered how family offices actually filter

deals, evaluate sponsors, and an engineer after tax outcomes, not just headline returns,

you're going to get a lot out of this one. Tom, welcome to the show.

Dave, thanks for having me. Really appreciate it. Yeah, great to see you again, Tom,

and really looking forward to our discussion today, which I think is going to be quite

illuminating for many in the audience in terms of how family offices are really seeing the world

in 2026 and beyond. What asset classes are you allocating to? How are you structuring

due diligence and looking at sponsors these days? There's just so much volatility and uncertainty

out there, right? And so I think it'll be helpful really to understand the lens that you're looking

at investing from and placing precious capital, how you're stewing that for your family and the

families that you serve. But before we start that, tell us a bit about how you actually got into

the family office space and investing. Sure. So, and thanks for having me, and thanks to your team,

too, for helping pull this together. I was an aerospace engineer first part of my life, so a little

bit of a different origin story, perhaps than others. Back in the 90s, I built an aerospace startup

with some other fellows up in Seattle, and it was not a huge success, but it was one of those

crazy entrepreneurial rides, which I know that's a lot of your audience have gone through similar

kinds of things. And in the end, we sold it to a very large aerospace company that everybody knows.

And I had the bug at that point, like I knew that I wanted to always be working, you know, small

companies at the cost of innovation, you know, trying to do new things. I went back to business

school and I came out as a venture capitalist out here on the West Coast. And it was a learning

period for me, for sure. This is back in 2001. And so, the only one who got into venture at that

time period, you know, certainly have went through some scars and things like that. But, you know,

those things make you stronger. I was with a top 10 Silicon Valley firm, and then my first family

office experience, I built a venture platform for a large four billion AUM entrepreneur. He was

just starting his family office, and I built out a venture platform there, and then helped him

build out the rest of the family office, eventually had about 60 people. So that was an interesting

part of my career. First time I learned, you know, kind of what the internal guts of a family

office look like, and how you do investments around that. I then got into the institutional

side of the business, and I spent a fair chunk of my career doing that at very formative years.

I worked for very large pension plants and sovereign wealth funds around the world. So,

I think clients with people like CalPERS and CalSTRS and New York Common Retirement Plan and some

of the Canadian pension plans and the media sovereign wealth funds. And our team, again, a small,

small for very entrepreneurial. We had about 35 people, but we did everything soup the nuts for

them around private equity, real estate, infrastructure, and private credit, helping them source

green diligence deals, find great GP sponsors to work with, and build their platforms. After that,

I spent about six years helping mostly mid-market and lower mid-market private equity firms build

their businesses. So a lot of new fund formation, you know, work on launching new funds, you know,

did some work with them on portfolio restructuring deals, seed deals, stake deals, and also a very

fascinating part of the private markets industry. I was with a large financial services firm,

which most people know, down in Los Angeles, for a couple years. They have a, you know, 30-40 person

private markets team, and we were putting out about two billion a year, again, in the private equity

real estate and infrastructure, private credit. And then I joined the DCA team here about four years

ago. And maybe I can tell you a little bit about the origin story, and that will connect the dots

in terms of what we focus on here, and then we can start more of that conversation. Would that be

appropriate? That's perfect. All right, great day. So DCA has been around the Central

Valley region of California and Reno for many years, you know, 20-25 years. The firm historically

has operated as a merchant bank, and most people know what that model is if they've been around.

Essentially it pairs up for families and family business owners in M&A arm that does buy and

sell transactions and helps them find capital or get exits, you know, out of their business,

with an investment team, the investment team, you know, mainly private equity,

writing five to ten million dollar growth and buy-out checks for family owned businesses and

companies. They were working with a client, a large family here, and helping them build that

client's business through tucking acquisitions. And eventually that client's business got fairly

large, their family's business got large, and they then asked the DCA team to sell it. And back

in 2021, that was successful, and that family then asked us to build them an investment team to

help them invest the proceeds. And so that's when I came on board, again, this was about four years

ago, and it was fairly large transaction, won't get into the numbers, but, you know, the family wanted

to do certain things. They wanted to invest in things that they could actually be a part of

helping to grow and develop. So see it, touch it, kick it, feel it, understand it, not just get

a quarterly report, you know, be very involved in the development of the investments and then the

actual value creation around them. And that was one of the things we had to figure out. They wanted

to do private markets, which is good, because that's the structure and the background of myself

and most of the team here. And then they were staring down the barrel of a massive tax bill

from selling this company, which was decades old. And we had to figure out how to do private

markets investments in a way that could alleviate that tax burden to the degree possible, either

defer taxes, you know, outright knockout taxes, you know. And so we came up essentially with a

program that was focused on tax-advantaged private markets investments. And that has now become

our calling card. And along the way, we've done tens of investments for them. And we put quite a

bit of their wealth to work, doing co-investment deals and direct deals in private equity, real

straight infrastructure, and then certain categories of what we call alternative yield. And do

that in a tax-efficient manner. And happy to tell you about what we've done on some of those

fronts and how we think about it and how that kind of structure and application could apply to

some of your listeners here. Yeah, I appreciate that framework, Tom. Yeah, why don't we, before we kind

of jump into some of the details there, can you just talk to us a bit about, you know, the asset

classes that we focus on in real assets and why? Yeah, absolutely. So in private markets, so there's

there's really four big categories, maybe five. And then there's lots of subcategories. But

most people know what private equity is. And the subcategories there are things like buyouts,

venture, secondary, distressed. Then there's private credit. A lot of people know what direct lending

is, you know, lending dollars to private companies. And there's various subsidies of that. And then

there's a whole category of things we call alternative yield, which have credit like aspects to them.

But they're not necessarily about lending to a company. And we spend a lot of time in alternative

yield. We'll go through that in a second. And then real estate. So certainly there's all kinds of

different real estate out there. I think everybody knows what they are. You look at your window. You're

going to see real estate. The building you're sitting in is real estate, obviously. And so we spend

a lot of time in those sleeves, which I'll go through to. And then there's things that are classified

as other real assets, low correlated things. So things like infrastructure, agriculture,

timber, classified in this. And in other kinds of things that are a little bit off the beaten path

and have lower correlations. So we spend time in all those categories. But as our focus is really

how to do tax efficient investments for tax sensitive clients, we've had to narrow down the

scope of what we do from what an institutional investor might do. From our past life,

CalPERS or CalSTRS, they're going to have some of everything I just mentioned. And not just

to some, probably a lot, given their scale and size. But for tax sensitive clients, once you sort

of consider what the tax efficiency, good or bad is around a given investment, it starts to focus

you on narrow specific categories within that space. And this will get to your question on what

we focus on. So in real estate, for example, we do a lot in hotels, a lot in multifamily apartment

complexes, mobile home parks, something we call corner retail. So car washes, you know, drug store

plots, sale lease back, you know, around corner plots, you know, things like that. We do a lot

in cold storage, some things in data centers. These things all have something in common versus a lot

of other kinds of real estate. So other kinds of real estate being like single family homes or

large office towers or, you know, kind of warehouse facilities that are industrial on the industrial

side. What they have in common is the things we focus on, they have tax advantage programs

associating with them where if you do the investment correctly and your client or the investor,

you know, the family has structured themselves from a tax positioning correctly.

You can use federal incentive programs and drive in a whole heck of a lot of tax alpha out of

these deals by saving taxes for your clients while you're simultaneously investing in new assets

for them. So, so that's an example on the real estate side. You know, agriculture is another

example. We do a lot in the permanent crops. So I think orchards, vineyards, anything that's

like a stone fruit, bushes, they blueberry bushes, hops, you know, things like that.

Anything that's a permanent crop also has a fair amount of tax incentives associated with.

There's other kinds of crops out there, things like road crops, corn, soybeans, you know,

what have you. Those are not as tax-efficient and don't have as many incentives for investors

around them. So again, we try to focus on the more incentivized programs in the places where we

can drive tax alpha, you know, more significantly. Back to private credit, right? Most people in

the ultra-high net worth world, you know, no, or at least they should know, that straightway

direct lending, you know, standard private credit that you see out there in the alts world is

terribly tax-efficient. And, you know, as soon as you sign out for one of those deals, you're

signing yourself up for a lot of, you know, ordinary income and interesting income that is going to

be tax at the highest tax rate. And there aren't really any tax incentive programs out there

that you can utilize to offset that. But there are certain things, and like I mentioned, alternative

yield before, for example, equipment leasing and financing where we spend a lot of time. So,

think buying and holding leased aircraft, commercial airlines, barges, rail cars, construction

equipment, things like that, pretty highly tax-efficient. So these things operate almost like bonds.

These leases can be long-term. They're backed by usually corporate entities, you know, which you

can underwrite as a credit and doing credit underwriting. And they produce stable cash flows. And

so that looks a lot like a bond or like a direct lending thing. But those things generate certain

kinds of federal tax incentive programs that you can use. And, you know, therefore, there's a lot

of tax alpha around those. And they're a much better play for a taxable client than, for example,

straightaway direct lending. So these are just a few examples I could go on, Dave. But that's how

we sort of pick and choose what our slots are. And, you know, try to make sure that, you know,

if we're working with a client or, you know, an ultra high network family or what have you,

they were really taking into consideration, you know, what their tax situation is in addition to

fighting and great investments for their portfolio. Yeah. Now, I think that really makes sense. And I

think a lot of listeners are, you know, really thinking about, you know, portfolio construction,

right? And where do I allocate, especially given the times, right? Obviously, there's a lot that's

bespoke to that, whether that be taxes, you know, the big capital gains event or something that's

happening, right? But do you have any, you know, kind of guidelines or parameters that you could

share with the audience in terms of just, you know, how you could think of maybe a typical type of

allocation structure, maybe something like a Tiger 21 or Yale Endowment fund is an example type of

thing. Any, any perspective on that? Yeah. I mean, I guess, I guess the, the first thing that I

would say is just your standard thing, you know, anyone who's been investing a long time would say,

diversification is key, you know, and I think, I think, you know, a lot of families have made their

money and probably done very, very well doing one thing or maybe two things, right? And, you know,

once they maybe stop operating their business, maybe they sell their business or maybe they're

thinking of investing some of the, you know, ongoing income or proceeds that they're getting off

of their business and to other things. And they kind of have a choice at that point, right? They

could say, I'm going to keep doing sort of the areas that I know well. I'll use a tech entrepreneur

as an example. Maybe they're made their money in some startup and it's tech oriented and let's say

cyber security. And they may say, I'm going to double down on that, right? I know all the cyber

security people. I know what's good. I know what's coming out. And I want to spend time around that

community and I can provide value to that. So I'm going to keep going down the path of, you know,

investing in a narrow sector, you know, or what have you. There's another choice, right? The other

choice would be, gosh, I've done really well in cyber security as an example. But there's a lot

of other kinds of investments out there and trying to find things that are, you know, low,

have low correlation to what I might have a majority of my family's holdings would probably be

smart because, you know, as one of my business school professors used to tell me all the time,

you know, there's really no free lunch invest in investing, but diversification is about as

close as you can come. Just in terms of building an efficient portfolio where not everything zigs

and zags at the same time, right? You want to find those things that that, hey, when something is

really, you know, not doing well, I've got something else in my portfolio that's really doing

well. And that's about finding things that don't have a lot of correlation with them. So we tend

to recommend more diversified portfolios, as opposed to sort of just sticking in, you know, one or two

certain things. And that's a generalized statement. Okay. So now back to your your questional parameters,

you know, the Yale model is interesting. I, you know, many, many decades ago met David Swenson.

I know a lot of people have met him in his phenomenal investor, right? But, you know, the Yale

model has always been pretty highly focused on all, but also highly focused on venture capital

within all, right? And so when you start to think now about a diversified, we call it the pie chart,

right? Where are you allocated? And what percent of your dollars go to each individual thing?

Well, you're probably going to have some in in public stocks and you're probably going to have

some in public fixed income. And then you're probably going to have some in all to the question

that we deal with with a lot of our, our clients is, okay, within all what do you want that pie chart

to look like, you know, for the spread of different things? And, you know, not, not all things are

created equal. You know, we have a, we have a really interesting chart that we, uh, we use and

unfortunately, I don't have it here today, but it goes through for each of those private markets sub

asset classes, many of which I, I described, you know, five or 10 minutes ago, you know, what is the

baseline return profile? You should sort of expect from deals like this. If you're investing at

the median or if you're investing kind of that second quartile or first quartile, you know, how,

what's the return profile look like? Okay. What's the risk look like, you know, around, around those

things? Because they all have different risk profiles. How do they correlate with each other and

or with public markets, which is a really important thing? And then finally, the third dimension,

which is, uh, you know, tax profile, how tax efficient are these things? And are they good or bad

from that perspective? Once, once you have a sense of what that is for the different types of

asset classes or sub asset classes, you can use, you start to get a sense of maybe what a good

portfolio construction might look like. And honestly, it is, it is different, you know, for each client.

There's no one size fits all, you know, especially as you get into ults. And, you know, people have

different views, clients have different views, things that they have affinity for, but, you know,

also they have different tax situations. They also have different, you know, risk appetites,

different return concepts, you know, in their minds. And, um, so we tend to find that it's not a,

it's not a one size fits all kind of a thing. And I think you see more of that one size fits all,

mindset over in the larger institutions, um, maybe Yale being an outlier. Okay, because it clearly

has a different asset allocation look than a lot of the other, the other big institutions. But

we, the institutions generally run off the same playbook. And that's a pretty standard template.

What we're seeing with the family offices is that, um, the templates are more customized.

They're more unique to individual situations. And, um, you know, they, they also tend to be,

you know, more interested in doing ults perhaps than the institutions are, as they look at how

their allocations end up on their pie charts. Like, they're more invested in all these days,

you know, a lot of them than the, you know, than the large institutions are.

Yeah, and let's unpack that a little bit, Tom, right? A lot of our listeners might be newer

to actually investing in the private, private markets, or maybe some people just on, you know,

a couple of different investments here and there. But as you said, a predominant amount of

families, you know, are investing in real assets on a private side. So can you just talk to us

a little bit about your philosophy in terms of, you know, private investing, you know, versus

exposure to public markets? Yeah, I mean, so, so at a high level philosophically,

the private markets have generally outperformed their, their sister or cousin investments

in the public market side over the last three decades. And that, that data is in now,

obviously, we're going through this tremendous public markets bull market right now.

And everybody sees that and says, wow, okay, but over time, you know, slow, steady,

methodical investing, you know, the private markets have outperformed 20, 25 years ago. We

didn't have that data. We didn't know, you know, and I say, we, I mean, the, the private markets

professional investors and advisors out there, you know, anecdotally, everyone's like, I think

this is doing pretty good, relative to the markets, but it took a couple decades for a few data

providers to actually provide the kinds of data that allow us now to say, okay, there's, there's

indices out there now for private markets. And there's benchmarks, you know, for private markets.

And you can start at the big private markets, but it goes all the way down to private equity. Okay,

now show me what, how buyouts have done. Okay, show me how buyouts have done in North America. Okay,

show, you know, show me how buyouts have done less than this enterprise value size. So, so there,

there are data resources now and you can actually go through and see how, how all of those private

markets investments generally and aggregate have performed versus the public markets. And we've

done that work to sort of map those out, right? You build lines of return over time and you see

how it looks and you see how they fluctuate and what's the risk and the volatility in them.

And, and a lot of other people have too. And essentially, you know, the data, the data is in.

And the private markets is out before. Okay, so that goes to your, to your question, which is

philosophically, we are very strong believers in private markets. And otherwise, we wouldn't have

put our whole careers towards this. Part of this is because there, there is a better return profile

there. And in certain cases, not all cases, the risks are different, but you're starting to see

the ability to actually measure and quantify risk also relative to the public markets. And

some of these asset classes also have a different kind of risk profile entirely. And, and sometimes

that means less volatility and it means more steady-eddy, depending on what you're buying into and

what you're doing. So, so philosophically, obviously, we're believers. The answer might, is not,

though, just, oh, just go out and put 100% of your portfolio in private markets. Like there's always

a place for publics. There's always a need for liquidity. Same thing with fixed income if it's not

public equities if it's, if it's, you know, public fixed income. Again, all these things have a

role in a portfolio. And, you know, our philosophy is, is private markets should play a fairly

significant role. And, you know, I think what I saw some UBS data come out, you know, probably

about a year ago, but they went out and pulled a bunch of family offices around the world. And,

you know, the US numbers came back that, you know, the private markets allocations for families in

the US is, if not at 50%, pretty close, you know, to 50% these days. And so, and so we believe in

a philosophical pie chart that looks something like that. If you're trying to drive alpha, especially

if you can do that in a tax advantage manner and put tax alpha on top of that, we think that's,

that's a pretty compelling way to build long-term wealth. Yeah, I was just going to ask that

of our, around tax, right? Because that's where you're going to get the best tax advantages,

you know, investing directly in private versus public. Yeah, and I'm having to talk about that a

little bit. I've been speaking with and, and getting to know our public, our public equity

counterparts in what we do, which is the people who do tax loss harvesting on the public market

side. So this is a pretty big thing. And for ultra high net worth, you know, most folks have some

some of this now kind of operating around their public markets portfolio. And there are big players

out there in the space. So I won't name names, but, you know, most people know who they are,

you know, there's probably 20 of them out there and every, you know, six months somebody else

launches a new product. But it's very interesting in talking to them as, as you mentioned, like there is

a set of pretty well known defining tools for how to operate on tax mitigation around, around

public markets portfolios, mostly public equity portfolios. But on the private side, not so much,

you know, it's newer, it's frontier-ish, you know, these tax incentive programs that

existed for years, if not decades. I mean, these are federally legislative, legislative and

incentive programs. But they change, you know, every time a new administration comes in, maybe

somebody puts their stamp on it with a new tax bill and they slightly tweak how they work and

what have you. And everyone's individual tax situation, especially on the private market side,

is different. And so it's complicated and complex. And so, you know, we're really interested in

trying to help educate the industry around how you can do things similar with the tax loss

harvesting folks have done on the public market side. But do it on your private markets portfolio,

or do it using private markets investments that might actually have, you know, different utility

within somebody's tax history. And we spend a lot of time doing that. We spend a lot of time

talking to the tax loss harvesters about that to kind of bounce ideas off each other and get their

opinions. And you guys are able to do this on a 1040. But what if you had this extra tool that

did that? And so we're spending time now and then, you know, trying to educate the broader

community around how that could work and demonstrating some of the things that we've done, you know,

for them. And so I think this is a building trend, right? It's still a little bit early, you know,

I think a lot of the ultra high network community is still learning about how to get the right size

allocation and the right, you know, access, you know, to private markets. But quickly on its

heels is coming not just that question, but okay, how do I now actually do this in a way that,

you know, saves or mitigates my taxes as much as possible so I can keep my money. And, you know,

have it built my AUM much faster and that that essentially is tax-elf. And we spend a lot of time

around it. Yeah, it's interesting, right? There's the private markets and tax here. It's very opaque,

right? And to your point, there's just been, you know, much less data, right, over time to be able

to kind of look at those different types of things. But I'm sure that's changing rapidly as we speak

with AI and lots of different tools and analytics that will come out to be able to do that. We've

certainly found, you know, great opportunities, you know, with tax yield on the private side. And,

of course, now it's really one of the best ways to really, as you say, increase, you know, AUM or,

you know, your net worth, right? But, you know, those taxes and the strategy. So, I've talked to

us a bit about diligence, right? I know you have quite a bit of deal flow that you go through

and everything, but, you know, help families understand a little bit about, you know, you know,

number one, your filter criteria, right? You have so much deal flow really kind of coming through,

so how do you, you know, and you only have so much time, right? How do you really kind of sort

through that? And then at the next level, you know, if you were to kind of take that second look

and kind of start the process, you know, what does that really look like? Yeah. So, yeah, it's,

it's a good question. And, yeah, this, this is part of just, you know, being, being a good sound

investor. Yeah, you want to, is what is one of my friends used to see all its, so see all the time.

You want to see as much as you can. You want to see everything out there, but you want to invest

in almost none of it, right? You want to invest in only the best of the best, as you, we call it

funneling it down, right? You know, top of the funnel, very large, very wide, see lots of deals,

helps you build market expertise, helps you build information, but as you go, as you start doing

work on things or picking things up, you're constantly declining things, just nonstop, right?

Until the best of the best survive, you know, it's, it's a survival of the fitness, right? In some

sense, on prosecuting deals, but to give you a question more specifically, you know, we, we probably,

you know, different folks see different numbers of deals. There's no, dearth of deals, there's no

shortage of access points these days that used to be hard, but it's not anymore, right? I mean,

I think everybody that you talk to has got access to a bunch of private markets deals of various

types and shapes. You know, we, we see about 1,500 a year of gear or take, most of our deals and

what tends to sort of peak our interest is, you know, we have partnerships we've developed with

Jeepy sponsors who are well healed in like a sector focus, for example, or they've been doing

the same thing for 20 years, you know, they've raised multiple funds, they've been successful,

and we do a lot of sourcing of our deals from them, like if you, they know who you are and you

know, they are, they're willing to share, you know, access to those deals, you have to be knowledgeable

about how to approach them and how to structure, you know, those deals with them. So finding ex,

you know, deals from the experts is really, you know, point number one, which is all of us like to

think that we're experts in things, but really the people who have been doing something for 20 years

in their career, they're probably a lot better at doing ex than you are and recognizing who you

are and who you aren't from an investor perspective and your knowledge base is one of the biggest

lessons, I think, you know, is really important for everybody out there in the investment community,

the advising community, for ultra high net worth is, you know, go find the best of the best and

get them to basically be helping you along the way. I mean, that's, that's one of the major points

here, right? So we see a lot and they come from people that we've worked with in the past and

we know very, very well, you know, we're probably going to look at that deal and will we spend

noodles a time and hour on it depends, you know, if it's a good deal, bad deal, fits what we're looking

for, you know, back to that pie chart construction, you know, our clients tax situation in any given year,

kinds of things that they're interested in, what they want to be involved in and what we find

interesting and intriguing as, you know, perhaps, you know, being less correlated with the norm,

not having a lot of competition, it's all the things you look for when you're looking at an investment

and trying to figure out whether it might be investible, but I guess my first point is that the

people are really important, you know, notwithstanding AI and everything else, like the humans around

these, around these deals, it is still very much a, a, a human-oriented business, it will be,

I don't know, forever, but, you know, it will be for a long, long time because humans have, have

just, you know, an amazing set of experiences and networks and it's still as a people business.

So, anyways, if you'd like to hear more about how we do that, so we're, we're taking a look at all

these things at the top of the funnel, we're screening them, tossing a bunch out, then we get to

the ones that we pick up and say, that's interesting, I might want to do some preliminary diligence on that

and we'll start doing preliminary diligence on those. For us personally, we might pick up

60, 10 deals a quarter, you know, to kind of get to that phase and we'll start spending time on

so we'll organize deal teams, you know, from our staff and we'll give them allocated,

we'll start doing work. Those teams need to come with some preliminary assessment to our

investment committee, you know, full written reports around what they're finding, risks,

possibilities, you know, all the different factors you would consider and then we're chunking it

down from there saying, okay, great, you know, you guys did like this deal, you didn't like this deal,

you know, we're just hacking a bunch more out and then, you know, the, the, the ones that make it to

the cream of the crop, we're like, okay, we're really going to go after this deal and we're going to

go do full diligence on it, Mike, take us, you know, X weeks or months to do diligence on thing,

but we're going to really lean in and we're going to do an old pile work and we're going to

do diligence these things and then you say, okay, get to your investment committee and say,

is, do we cross all the eyes, do we dot all the T's, is there something we're going to commit to?

And if so, then it gets into legal and closing. And by the way, deals fall out in legal and

closing all the time. I mean, it's, it's even then that the bottom of the funnel, right, things

are still getting kicked out for various reasons, you know, it, you find out that you thought you had

a term negotiated with someone on, on a counterparty as a seller or whatever, you're trying to buy

something and nope, you know, that, that, that's a, that's a, or actually, didn't remember you

talking about that term or whatever and it's a critical term and, okay, being willing to walk

away from these things is really, really important and, you know, it's hard, right, as, as you go

through and you spend a lot of time and energy on them. And, you know, we, we talk as a team about

this all the time, like, don't ever become so enamored with your own deal that you're not willing

to walk away even at the last minute when you're doing the wire, right? I mean, it's, it's, uh,

it's a very difficult thing once you get involved and you spend a lot of your time and it could be

career time, you know, six months a year, whatever you're doing on a deal and, uh, but you always have to

be willing to walk away and always know that there'll be something else that you can go work on and

another interesting deal that's right behind it and that is, that, that can be very difficult

as you go. So, anyway, Dave, ask you another question. I know it's a lot of time. Yeah. So,

that's, that's super helpful, Tom. I really appreciate that. Um, if you're looking at sponsors,

so let's say you're looking at a self-storage opportunity or something, right? Um, you know,

you've got sponsors that are from kind of very early stages, maybe less than a hundred million

and a well, uh, all the way up to your institutional providers. How do you really, uh, you know,

rack and stack sponsors, right? Yeah, perspective. Yeah. So, uh, there's, there's a lot of different factors,

you know, track record is obviously, you know, one, everyone will tell you about that. The people

are important. I mentioned that before in understanding the dynamic of the people within the business,

if you could do a deal with a GP sponsor, for example, you might be in that deal with them for

four or five, 10, 15 years, you know, whatever it might be on private markets. So, you better get that,

you better, you better really know how those people, you know, think philosophically and what

their alignment is and what their incentives are, right? You know, the people who are actually

doing the deal, not the mothership that they work for, okay? But just those people and

that's a really important consideration that we spend a lot of time on. You know, we're thinking

about GP sponsors. You know, there's, there's also two, how they

think about what they're doing in their own firm life cycle. So, some groups are, you know,

headed to the moon, you know, around we're just going to go raise a pile of massive fun capital

from institutions and, and that's our objective, right? It's almost like an AUM gathering play.

And, and they're not really overly concerned about whoever they do deals with along the way

because their, their business is heading in a different direction, perhaps. It's important to

understand that and, and where they're going. And, you know, it's, it's kind of like you're looking

for the Goldilocks Zone, you know, not too hot, not too cold, just right for the kind of relationship

we want with the right kind of people that are willing to stick it out with good alignments,

you know, for a long time period. I guess, I guess another thing too that we like to look at is

the network of relationships that these people have. And we spend a fair amount of time on that,

doing ref, you know, obviously everyone does reference calls, but, but really trying to understand

what they know about the particular thing that they're trying to invest in. There's academic

knowledge, but there's also human relationships and knowledge, right? Like, who do I know in this

sector? Let's say it's a healthcare deal, or let's just say it's a self-storage deal, right? Like,

there's a lot of things that can go right in any given deal and there's a lot of things can go on.

And when things aren't going well, which you want to know before you get into a deal with someone

is, hey, are they going to work their butts off to make it better? Okay, of course, but be,

who do they have available around it from their own personal networks? They can help solve

these problems, you know? And, you know, self-storage, I'll use as an example, you know, sometimes

really understanding and knowing the local market, the sub-market of that specific self-storage

facility, if it's just one that you're buying. Okay, how well do these guys, how immersed are

they in the community? Like, how well do they know the permitting people? How well do they know

the city people? How well do they know, you know, the access point people that might be trying to

serve them and get them clients? You know, how well are they immersed in the self-storage community?

Are they known? You know, if I call up five other self-storage GPs, are they going to know who

these guys are? And they talk and they help each other, even though they're semi-competitive, yes.

But, you know, just being able to understand what that market is doing and doing that through

human touch is really important to us. And we spend a lot of time trying to figure out what those

networks are. Tom, how are you using AI in the business to accelerate results?

Yeah, so, so this is obviously new coming already here, you know, depending on what you're doing.

We haven't used it that much other than I would say at this point,

background market research, and very rapidly coming up to speed on something that we might

find interesting to sort of support what I would call almost preliminary discussions on market

and sub-market and things like that. Now, what everyone's trying to get to, and I think I,

you know, every six months, I see another solution for this now that I think people are getting

closer. One of the whole thing is like, hey, I want to have most of my diligence being done by my AI.

Right. I could just pile in a PPM or an OA or whatever, all the documents for a deal,

pile it into the AI. And, you know, I've given it my investment memo and the thing basically

and cranks away for a couple of weeks with some modifications and it turns out investment memo

and I'm ready to go. Now, I know that every investor will say why I would never do that, right?

I still need to have the humans involved, but I am seeing solutions that are trying to get to that,

right? And we have not used anything like that at this point. And I have found that, you know,

the people that are offering such solutions now, you know, key question to sort of work through

with them is how did they train this thing, whatever it is, you know, because you obviously want to,

well, I could pop out a couple good ideas and I should go flag down those ideals ideas and

hunt them down. But whatever they're training it on, it's really, really important. And, you know,

certain, obviously large private equity firms, they've got thousands of due diligence memos,

right? And they can feed them all into their sort of walled guard and AI and come up with sort of

this, how does the firm think about deals, you know? And let's have this super brain that really

knows how we think about deals operating on it. But most of the smaller firms can't afford to do that.

And, and then most of the providers that I've seen that have been, you know, providing AI

solutions around that, like they're trading database of deals, documents, diligence memos,

thinking, you know, at this point, like they haven't really had enough access to the broader white

world to train those AI's to do anything more than just sort of help on the fringes of the

research as directed. But I think, I think, you know, time will tell, right? I think progress will

be made on these fronts. And, you know, over time, they'll, they'll certainly get better. Again,

I don't ever think it's going to replace the human touch. I think it's different in public

markets versus private markets. You know, data can be opaque, you know, in the private markets.

And, you know, humans are still going to be around these deals for a long time. So,

so we're, we're watching, I guess is, you'll probably get this answer from many people. So,

I'm not saying anything that both of the listeners don't know. We're watching, we're testing,

you know, here and there. We're dipping our toe in the water. But, you know, we're, we're,

we're all, we also know what we've done in the past and how it works. And, you know, we'll keep

doing that until such time as, as, you know, there's a better, there's some, some other way to do

business. But right now in the private markets, I don't, I don't see, I don't see much of that

change in your term. How about from a macro perspective, right? You've got certain folks like Peter

Schiff, you know, always talking about the end of the world, you know, coming and it's going to be

a really tough year. You know, you've got this basement trade going on, right? People feeling

like we're at the tipping point in terms of, you know, where we are with the debt. Anything's

like that. Any areas that investors should really be concerned of areas to, to really pay attention

to. Yeah, you know, I, it's, it's an, it's an interesting question. I think there's a predilection

within the investment community for everybody to opine or, or form an opinion on, on macro as if

they are in economists, you know, a trained economist. I am not a trained economist, okay? So

again, recognizing what you know and what you don't know. Now, it's nice to follow, you know,

what's happening out there. But yeah, for every, every prediction that I've probably made,

hey, like, is the stock market going up? Where's it going down? I was probably, you know,

how often have I been right? I don't know, right? So, so, and then we, you know, we could, we,

we've all gone through this kind of discussion in our lives. I think, you know, you know, we're,

where macro really becomes, I think, a little bit more important for us is around the individual

deals that we're doing and the impact of some of those macro trends around those deals.

But they tend to be a little bit fight, you know, a finer point on it. So I'll give you an example.

We've, we've done a pile of, of nut farm deals out where we are in the central valley. Okay,

long good, pistachios, walnuts, what have you? So macro is important in ag,

but we spend time sort of focused on the very specifics around the things that are happening,

either from a fiscal policy, monetary policy perspective that could affect those investments and

specifically, you know, those, those nut farms that we have and, you know, things like

what might affect pricing and what are some of the supply and demand considerations, you know, around

almonds, you know, what, what are the trends internationally around that? So, so you've got things,

I'll give you just, you know, to finish up the example. So we spend time trying to understand

terror policy, you know, I mean, is that something that everybody likes to do? No, you know, it's,

it's a, it's a difficult thing, right? Especially with how things have been moving with this

administration, whether you like it or not, I think we'd all agree that it's kind of whipsawing and

it's, it's, you know, every, you know, month or three months, there's someone new announcement

or what have you, but, you know, I think 80% of roughly, child porn is all in crop, it is

sold overseas. And so terrorists are a big deal, right? In terms of affecting pricing,

affecting, you know, supply demand, you know, around, demand, you know, around that. So that's

interesting. On the other side, you've got, you know, fiscal policy and other things that are

happening that are weakening the dollar, you know, relative to international markets, right?

And so again, if 80% of the product out here in California is being sold internationally and are

dollars weak, okay, what does that mean? Like around, around pricing and dynamics and, you know,

the farmers have to think about things like, you know, there's a lot of game theory, you know,

around all this, like who's planting? How much is going to get planted? Should I plant that extra

hundred acres or not? Should I leave it follow this year? You know, whatever it might be? And so,

so we do spend time at that level, which is, which is different than I would say, just, hey, macro

where the market's going? It's, it's more around specifically focused on the things that might

affect an investment either that we're going to do or thinking about doing or investment that we've

already done. Yeah, yeah, now that's really great from an insight perspective. If you could give

just one piece of advice to the audience about how they could accelerate their own wealth trajectory,

what would it be? Well, okay, not a tax advisor. So certainly, we'll make that caveat before I say

this, but I think focusing on aftertax return profiles and really understanding the integration of

what they're investing in versus what it will produce from a, a taxable income perspective

and or what kinds of credits incentives, deferrals they can find out there. I think that's,

that's, that's the biggest thing that they can do. Obviously, diversification, we already talked

about that, but you know, once your past sort of the two dimensions of risk and return that,

you know, we all grew up as investors sort of thinking through, that third dimension of taxes

is really, really important. And, you know, a lot of our models and things that we've even done,

if you can save, keep those dollars in your portfolio for longer and not ship them off to the U.S.

government, you know, it's wildly effective in generating long-term wealth. And we think that's

really important. And so that's the one thing that I would, I would mention and, you know, just

advocate that people try to focus on more and, you know, if their advisors aren't focused on it,

then, you know, ask them, you know, pound them on ahead a little bit. You know, I, I, I find this a lot

in taxable ultra high net worth world where you've got a set of advisors that are advising you as

an ultra high net worth family. And one set is probably your trust in the state attorneys.

And they are very good at understanding generational tax issues, structuring

estate and different kinds of trusts and things like that, to sort of minimize taxes you go.

Then you've got your CPA team, we'll call it that, or your accounting team or your tax team. It might

be big floor, it might be a small tax accountant, it might be your internal folks, you know,

the accountants that feed into them and they're preparing generating your tax returns, right? And

generating your financial statements and what the taxability of that, you kind of have that team.

And then you have your investment team in your investment advisors. And I guess, I guess one of the

things that is intrigued me or just maybe, I'm not right sure if the word is about the spaces,

those groups don't spend a lot of time talking to each other. Yeah, right? Like they spend a

lot of time doing expert work in their sleeve and their silo, but there's no working group amongst

them necessarily to sort of say, hey, investment guys, we're the trust in the state guys, we have

this long term plan. What are you doing specifically in this, whatever you're buying from an investment

perspective to help this long term plan, they're not talking to each other about that. Or I see

this a lot too, the investment guys are just like, hey, I'm going to do a bunch of great investments

for my family or for my client, right? Or whatever it is. And they go off and do that. And then

at the end of every year, a bunch of K ones are generated. And those K ones have a whole pile of

stuff coming up, you know, to the tax, you know, the CPA folks and tax folks, right? And those

CPA tax folks just take all those K ones and they're like, oh, can they plug it in their software?

Okay, now I got all these K ones. I'm going to pay all these taxes. I'll go in through schedule E

or D and then just pay those taxes, right? They don't ever feed back to the investment guys and say,

you know, maybe you shouldn't be investing is that in that kind of thing because that thing's

really bad from a tax perspective. And we didn't want to pay all those taxes or we never thought

about this incentive or trying to cross-knock these things out. So anyways, I think, you know,

another, just another point is the more that we from the investment side and the trust in the

state folks and the tax CPAs can actually get together and work together not only on developing

a plan, but the next acuting on that. I think it's, I think it's been a really change things and

help in long-term wealth generation quite a bit. Yeah, 100%. We see the same thing. And if you can

have someone in the middle who's really quarterbacking this, right, you'll be doing all the different

areas because, you know, might be the greatest investment, but like you said, now all of a sudden,

you know, it's it's very tax inefficient or maybe it's tax efficient. It's a great investment,

but you've added all this unnecessary risk, right? That doesn't comply with your risk management plan,

right? And takes on a new consideration. So really looking at it three dimensionally and holistically,

I think is the best way to do it. So Tom, I can't thank you enough for all your insights and wisdom

today. So much information to unpack. I'm not going to go back and listen to this again. We're all

trying to become better investors in this world, you know, better stewards of capital,

place capital efficiently. And it's also about relationships, as you said. So how can we, you know,

keep building better relationships, also building our intellectual capital, improving our financial

IQ, so we can make the best decisions for our family. So if anyone would like to, you know,

connect with you or reach out, is there a good place? Absolutely. So you can go track down our website

at DCAFamilyOffice.com. My email address, just so people know, it's just T. Brackovich. I think

you can see my name there on the screen, so you'll be able to spell it, but T. Brackovich at DCAFamilyOffice.com

is the best way to get a hold of me. Certainly, they can reach out to you to Dave and you'll

connect them with me if they'd like to speak more. But I want to thank you too for pulling this

together and the work that you do also, Dave, is really important just for folks to hear what's

practically happening on the ground, you know, and what different people are offering solutions

and getting the word out. And so, you know, it's really important, you know, this podcast and the

work that you're doing on that. And, you know, if we can be helpful to you along that way,

the more different types of discussion just let us know. Thanks Tom, really grateful for your time.

Appreciate that. All right, Dave. Thanks. Thanks for listening to this episode of Wealth Strategy

Secrets. If you'd like to get a free copy of the book, go to HolisticWealthStrategy.com.

That's HolisticWealthStrategy.com. If you'd like to learn more about upcoming opportunities at Pantheon,

please visit PantheonInvest.com. That's PantheonInvest.com.