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Mr. Adi Divgi, participated in Cayman Alternative Investment Summit 2015 on the panel of Extended credit: Alternative Strategy Across The Credit Spectrum.

Please click on below picture to watch part of his appearance.

Please contact us for the full video if interested.

Source: Courtesy of Mr. Adi Divgi

Original title: Latin Investors Summit 2015 – Event Highlights

Mr. Adi Divgi, President and Chief Investment Officer of EA Gloabl LLC, served as Chairman of the Summit.  Listen to his review in the summary video of the event here (00’32”-00’41” ,01’41”-01’52”, 02’53”-03’06”).

Source: Latin Investors Summit 2015 – Event Highlights

Family offices spoke out in Los Angeles about the turn-ons and offs of investing in real estate at the PERE Global Investor Forum.

A rare glimpse into the way family offices think about real estate was offered during PERE’s annual Global Investor Forum in Los Angeles in April.

In a session called “All in the Family”, three panelists explained how their respective organizations dealt with modern-day investing and what potential deal partners could do to turn them off.

Moderated by Larissa Herczeg, managing partner and chief investment officer of seeding and strategic capital at Chicagobased Oak Street Real Estate Capital, the panelists comprised; Kathy Briscoe, chief operating and real estate investment officer at Cordia Capital Management, Mark Kruttschnitt of CML Investments and Adi Divgi, president and chief investment officer of EA Global.

Divgi, who used to oversee opportunistic fixed income investments for four New York City pension funds and now invests on behalf of his own family office and a reinsurance company, said the way he invested in real estate was more “happenstance”. Addressing a question concerning the turn-offs of a potential partner bringing a deal, he said lack of knowledge of tax effects of investing was “disappointing”.

The managers that have the knowledge and know-how to structure deals will certainly have a leg up in my book.

He said he preferred evaluating managers smaller than $2.5 billion in total assets under management as he typically found greater “alpha” in that strata of investment partners. He cited an example of an investment in a Los Angeles-based real estate investment firm that raised $25 million, making an investment into the fund at the final close, after it had already sold one investment.

Investing at the final close enabled us to get a level of visibility that many managers do not provide, because they encourage you to get in by the first close. The visibility, transparency, and proceeds coming back so quickly were among the factors that I found compelling.

Cordia Capital’s Briscoe said the firm was only making direct investments and was working with consultants to help inform asset allocation and provide good risk-adjusted return analysis. The family office has a mandate for core, value added and opportunistic investments. She said one of the challenges was in having a lean staff and to compensate the talented team as if they were working on a long-term fund.

Meanwhile, Kruttschnitt explained how he looked at just risk-adjusted returns for the different asset classes and said family offices thought a lot more about taxation than institutional investors did.

He said most of the deals he becomes involved with are introduced by local operating partners. “Being part of the GP can be great,” he said. “It needs regular meetings and takes a lot more time than being a limited partner but the pays-off can be much more lucrative.” But one of the most frequent factors that made him “walk away shaking his head” was either not agreeing with an individual’s view or a lack of preparedness on the part of the firm introducing a deal. He said: “It is amazing to me how little due diligence some managers will do before presenting a deal to their equity markets. If I can find problems with the deal in the first five minutes that they hadn’t thought about after three weeks of showing it to multiple investors I just walk away not only from that deal but from the person that is presenting it to me.”

Responding to another question about common mistakes, he said mistakes were linked to resources and experience. “If you don’t have a long background in real estate you shouldn’t be making direct investments. It is the same with venture capitalism. If you don’t have tech expertize, you should not be doing individual VC deals. Sometimes people get stuck when they don’t know the submarket or type of property or the greater economy of the area.”

Divgi added he was often looking to network with other family offices where not only could he swap ideas but also be introduced to transactions. He added he was also looking at making fund commitments, but highlighted how alignment of interest was important.

If a manager puts in 1 percent of the equity and they are taking out 1 percent in fees every year I don’t think that is skin in the game. I would look for a much higher percentage. With direct deals there is much more alignment of interest.

Source: PERE magazine June 2015 issue

In this week’s blog, I interview Adi Divgi, president of EA Global, his single-family office established in 2005. Adi offers valuable insight into Collaborative Procurement, and why family offices should care.

Adi’s Background

Adi was born in India and raised in New York. He attended public primary and secondary school in Manhattan before earning his BA in International Studies (Spanish minor) from the University of Pennsylvania, a BS in Economics and an MBA in Finance from Wharton. He is a proud graduate of the Huntsman Program. Adi began his career at Deutsche Bank, working in New York and Mexico City. Being a global traveler with native fluency in Spanish, he found that his international background allowed him to adopt a more global mindset with respect to his investment philosophy and approach to risk.

Adi established EA Global in 2005 so that his family could administer its various properties, and overall asset allocation from a centralized investment vehicle. The family office currently has one operating vehicle and one investment subsidiary. In 2013 the family had a liquidity event- selling one of their Manhattan properties. Looking to the future, EA Global plans to diversify away from residential real estate, and replace lost rental yield with current income-generating strategies.

In addition to EA Global, Adi is head of Alternative Investments at Quanta US Holdings Inc.- a Catalina Holdings (Bermuda) Ltd Company. Prior to his current role at Quanta, he oversaw a substantial Alternative Investments program at a large North American institutional investor. With approval from the investor’s board of trustees, he executed over $3.5 billion in capital commitments in alternative investments. He also oversaw the initial development of the manager search process for the investor’s $1.5 billion allocation to Emerging Markets Debt.

Adi’s two proudest accomplishments are creating an evergreen investment platform in his prior institutional role that has generated over a 15% net IRR since inception, and having his wife, Ekta, and son, Arjun, featured as models in Season 10 of Project Runway. (Click Here for link. Arjun’s cameo is at 4:24 and Ekta’s dialogue starts at 7:21).

What is Collaborative Procurement? Why should family offices care?

Collaborative Procurement enables like-minded families to create “commingled separate accounts”, into which capital is contributed to invest proactively in a common mandate. Family offices employing Collaborative Procurement could potentially replicate an institutional investor’s ability to create strategic partnerships with best-of-breed managers. These partnerships, in addition to a more competitive pricing structure, would also more effectively align the interests of the family office investor’s limited partners with those of the fund manager and general partner.

What are 1-2 simple truths to family office investing? What are the opportunities for FOs through partnering with an institutional investor?

The biggest truth is that all families are different. Family dynamics, idiosyncrasies and values influence choices families make about their assets. As a result, investment programs need to be designed at the outset to incorporate each family’s unique situation.

I discovered another simple truth in March 2011, when I simultaneously managed my EA Global family office responsibilities, and oversaw a $7.5 billion allocation in alternative investments at a top-10 AUM US institutional investor. Although it has narrowed over the past several decades, there continues to be a wide gap between the private wealth and institutional worlds in terms of their respective investment approaches towards alternatives. Having “worn two hats” I saw firsthand the tremendous benefits of developing best practices in investing, as well as infrastructure in my clients’ institutional portfolios. This experience led to subsequent potential implementation of such practices in EA Global’s platform. Other family offices can similarly benefit from implementing institutional best practices for alternatives in investments and infrastructure. The alternatives investment platform that I created started investing in December 2011 and has generated over 15% net IRR as of December 2013 across approximately $1.5 billion in invested capital. It is important to remember that there is no free lunch. Best practices entail fixed costs that typically require a minimum commitment to make implementation economically feasible.

How might a family office go about partnering or find peer investors to scale their platform? Where should they turn for resources or advice?

The key ingredient for a successful and scalable platform is a strong leader who can execute the institutional investment strategy and develop corresponding infrastructure. I would strongly suggest exploring the Global Thought Leadership Network to maximize sourcing opportunities. Critical mass is also very important to offset fixed costs associated with incorporation of institutional best practices in alternatives.

I am also a potential resource for family offices since I have executed this strategy, developed the infrastructure and created a global sourcing network on behalf of EA Global and my institutional investor clients. My on-the-ground sourcing relationships are based in Miami, Los Angeles, San Francisco, New York, London, Dubai and Kuala Lumpur, among other locations.

What are 2-3 best practices for family offices when it comes to collaborative procurement?

The most important thing is for families to have a common set of core investment guidelines. These include a drawdown (versus fully-funded) investment structure that is incentivized to seek opportunities only when they offer the best risk-adjusted return based on a benchmark agreed upon upfront by the investor limited partners. Similarly, the capital would be returned to the vehicle when such returns are no longer attractive on a risk-adjusted basis. Independent service providers are also important so that there is no conflict of interest. These include Administrator, Bank Custodian and Prime Broker Custodians (if applicable).

Posted by: Adi Divgi, Source: Interviewed by Dr. Kirby Rosplock on 3 July 2014, Dr. Kirby Rosplock Blog

The third feature this week is an audio interview with Adi Divgi on the topic of “collaborative procurement.” Adi is the president of EA Global – a single family office created in 2005.

Interviewed by Practitioner editorial committee member, Kirby Rosplock.

Click here to hear the audio.

About the contributor:

  Adi Divgi is the president of EA Global – a single family office created in 2005.

Source: posted by FFIPRACTITIONER, The Practitioner, August 20, 2014

Adi Divgi, a speaker at the marcus evans Elite Summit 2014, on how family offices can incorporate institutional best practices towards alternative investments in their own portfolios to attempt to replicate the success that such institutional funds have had. Interview with: Adi Divgi, President, EA Global

FOR IMMEDIATE RELEASE

“If family offices act in aggregate to create “commingled separate accounts” in which their assets are bundled with assets of other like-minded family offices, they could have the potential ability to act like larger institutions and create strategic partnerships with best of breed managers,” proposes Adi Divgi, President of EA Global. Such family offices, he adds, could effectively replicate what he successfully did at a multibillion dollar North American plan sponsor until this past April for an allocation of USD 7.5 billion to opportunistic credit.

Mr. Divgi, a speaker at the marcus evans Elite Summit 2014, taking place in Montreux, Switzerland, 16 – 18 June, shares his unique perspective on investing, as a manager who has worn both the institutional and private wealth management “hats”.

What could private wealth managers learn from your experiences at the multibillion dollar North American plan sponsor?

Mr. Divgi created the first and only fund of one investment platform in alternatives at the plan sponsor, in which the sponsor acted as the sole limited partner. It created customised accounts with best of breed investment managers, incorporating best practices on market trends, valuation, pricing, administration, and policies that Mr. Divgi learned from thought leaders in the investment and infrastructure space.

Given the size of the plan sponsor’s fund, Mr. Divgi executed tickets that ranged from USD 250 to USD 600 million, allowing the sponsor to drive the conversation with managers and align interests as much as possible. Most family offices cannot write checks north of USD 50 million. “Bundling” would enable like-minded family offices to pool their assets to create a “commingled separate account”. Combining this structure with the institutional best practices that Mr. Divgi implemented at the plan sponsor would enable these families potentially to replicate the success that the plan sponsor had in generating compelling returns in this alternative investment platform (15% net annualised since inception IRR as of 31 December 2013, with inception on 15 December 2011). It is critical that these families hire an advisor who has had success negotiating with managers, executing the investment strategy, and developing the corresponding infrastructure.

What asset types would this structure best accommodate?

It can accommodate both short- and long-duration assets, from less than one-year paper on one end to private credit and direct lending to mid-market companies on the other. Families should know in advance that this structure does not accommodate periodic liquidity (e.g. on a monthly or quarterly basis), but rather is similar to a drawdown structure with an investment period in which the capital commitment is locked up over a certain number of years.

Banks have typically dominated the private credit area, especially in Europe. Due to increased scrutiny and regulation, they can no longer lend in the same volume. As a result, many companies are starved of capital. Institutional capital can effectively replace banks as lenders of last resort. This vehicle could effectively do that either by providing a manager with capital as a limited partner or by investing directly in assets that would be managed internally post-execution. Again, it is absolutely critical that the families interested in developing this structure and platform hire a leader with success in executing such a mandate at the institutional level.

If this concept was successful at the plan sponsor, does it mean the platform would also work in any family office?

Although there are many reasons why this platform was successful at the plan sponsor, the platform itself may not necessarily be appropriate for every family office. However, there are institutional best practices that families could incorporate in their own portfolios of alternatives to enable them potentially to replicate the plan sponsor’s success to a significant degree.

Original title: Elite Summit 2014: Adi Divgi News Release, Source: PRESS-OFFICER, 2014/05/14, MARCUS EVANS Press

Here at gaim we’re looking forward to our next event in Monaco, which is hurtling towards us at the speed of a Formula 1 racing car! To find out a bit more about some of our speakers, we’ve been asking them to talk about subjects that are of significance to them and to the industry. We caught up with Adi Divgi, President & CIO of EA GLOBAL, who answers some questions on collaborative procurement and how this can work for investors; with the right resources, market intelligence and investment principles.

To hear more from Adi, come and listen to Investor Quest at 12.20 on Monday 22nd June. 

Adi Divgi, president and CIO of EA Global, his family’s private investment LLC established in 2005, provides GAIM insight into Collaborative Procurement.

Q: What is ‘Collaborative Procurement’? Why should Institutional Investors and Family Offices care?

A: Collaborative Procurement enables Institutional Investors as well as Family Offices to create ‘commingled separate accounts’ in which capital is contributed to invest proactively in a common mandate, e.g. LP interests in a hedge or private equity fund, or a direct credit or equity investment. In addition, Collaborative Procurement could potentially enable Institutional Investors and Family Offices to create strategic partnerships with best-of-breed managers. These partnerships, if executed properly, effectively align Limited Partners and General Partner interests with higher than average thresholds for pay-for-performance as well as potentially greater control for the Limited Partners over investment  guidelines and portfolio construction.

Q: What are 2 simple truths about Collaborative Procurement?

A: One simple truth is that Collaborative Procurement is not easy. Dynamics among Institutional Investors and Family Offices are ever-changing. Investment programs therefore need to be designed to be flexible at the outset to incorporate each Investor’s unique situation.Adi has discovered another simple truth in the past 4 years: Collaborative Procurement, if executed properly, works. Since drawing capital in December 2011, the NYC Pensions’ platform that Adi developed has generated 14+% net annualized IRR as of December 2014 across almost $2bn in investments. There continues to be a wide gap between the Family Office and Institutional Investor worlds in terms of their respective investment approaches towards Alternative Investments, although it has narrowed over the past several years. Since March 2011, Adi has simultaneously managed his EA Global responsibilities and overseen 2 institutional investment programs consecutively: first, an $8 billion allocation to Opportunistic Fixed Income at the 4 participating NYC Pension Funds until April 2014, and since then, a nascent platform for Alternative Investments at Catalina. After seeing first-hand the benefits of developing best practices in investing and infrastructure for Alternatives in these two institutional roles, Adi has implemented many in EA Global’s own platform. Institutional Investors and Family Offices could potentially benefit from implementing such best practices in their own programs, as evidenced by the performance of the ‘fund-of-few’ Opportunistic Fixed Income platform that Adi developed at the NYC Pensions.

Q: How might Institutional Investors and Family Offices partner or find peer investors to scale their platforms? Where should they turn for resources or advice?

A: Key ingredients for a successful and scalable platform include:

1. An experienced leader who can execute the institutional investment strategy and develop the corresponding infrastructure;
2. Development of global networks to maximize sourcing of investment opportunities and market intelligence;
3. Minimum AUM to offset fixed costs associated with the implementation of institutional best practices.On a selective basis, Adi serves as a potential advisor on Collaborative Procurement to Institutional Investors and Family Offices since developing his platform at the NYC Pensions and creating a global ‘Thought Leadership Network’ on behalf of both EA Global and his institutional investors. His on-the-ground relationships are based in Monaco, Miami, Los Angeles, San Francisco, New York, London, Dubai, Kuala Lumpur, and Panama City, among other locations.

Q: What is the most important best practice for Institutional Investors and Family Offices when it comes to Collaborative Procurement involving strategic partnerships with potential General Partners?

A: It is imperative that Institutional Investors and Family Offices have a common set of core investment principles before seeking a strategic General Partner for a Collaborative Procurement program, e.g. developing a drawdown (versus fully-funded) investment structure that is incentivized to seek opportunities only when they offer the best risk-adjusted return based on a benchmark agreed upfront by the Investor Limited Partners. When returns are no longer attractive on a risk-adjusted basis, the capital would be returned to the vehicle. Independent service providers (i.e. Administrators, Bank Custodians, and Prime Brokers) are also important to minimize potential conflicts of interest in the valuation and pricing of the underlying partnership assets.

Source: A Case for Collaborative Procurement, gaim

Adi Divgi, President, EA Global and a speaker at the Elite Summit 2014 discusses bridging the gap: incorporating institutional best practices into the family office investment structure. There tends to be a wide gap between the institutional and private wealth worlds when it comes to the approach they take to their respective alternative investment portfolios. The structure and focus must accommodate the unique needs and regulatory frameworks governing each. Adi Divgi has extensive expertise across both institutional and private wealth areas, from his successful track record at a multi-billion dollar North American plan sponsor to the development of his own single family office.

Source: Marcus Evans Elite Summit (June) 2014, The Regional Collection: Europe & Middle East