This Week in Beyond Wealth
How concentrated equity holders approach the sell vs. hold decision.
What it costs to set up basic and advanced estate plans.
5 types of SPV fees an investor can pay.
Money & Markets
What should I do if most of my net worth is in my company’s stock?
We published a guide for anyone whose company stock has grown into most of their wealth, based on insights from Long Angle members who've been there. Here are a few takeaways:
1) Know what you hold: Before making any decisions, tally your total exposure including vested shares, unvested awards, and income tied to the company. Calculate what share of your investable net worth that equates to.
If you’re unsure how concentrated is too concentrated, see the table below for peer benchmarks. Public company employees typically hold less in one stock as they sell down after an IPO and reallocate.
2) Right-size your single stock exposure: Ask yourself if you held none of the stock today, what share of your net worth would you put into it? For many, that answer is well below what they currently hold.
Write down how much you intend to sell and diversify, how much you intend to retain, and what would change that plan. Those who’ve held a single stock for the long term describe sizing it so that being wrong won’t create regret across the whole portfolio.
Life, Health, & Family
What does an estate plan typically cost?
We polled nearly 200 high-net-worth households asking what kind of estate plan they have and what they paid to set it up.
67% have a basic will and/or a revocable living trust. 17% have an advanced plan built on irrevocable structures like SLATs, GRATs, IDGTs, or dynasty trusts. 16% have no estate plan at all.
For basic estate plans, three quarters who have one paid under $5K to set it up. For advanced plans, most paid their estate attorney over $10K in legal and drafting fees.
Cost tracks complexity. A will and a revocable trust are largely standard documents. Irrevocable trusts are drafted around the household they serve, and that's where the bill moves from four figures to five.
Those weighing the advanced route tend to raise it with an estate attorney before a liquidity event, since a transfer uses lifetime exemption at the asset’s value that day, and anything it grows into afterward never counts toward what’s taxed when you die.
Private Market Perspectives
What fees am I paying in an SPV?
A special purpose vehicle pools capital from investors into a private investment.
Both fund managers and SPV administrators charge fees. Here are the five types:
1. Carried interest: a share of the profits at exit. Median 15%, though sponsors may still charge the traditional 20%.
2. Management fee: charged on committed capital, most commonly 2%, and usually for one year.
3. Formation and administration: from the SPV administrator, taken out of the money raised.
4. Underlying expenses: charged against the vehicle's assets over its life, and rarely disclosed as a capped figure.
5. Intermediary fee: charged by a firm that sources and diligences the investment, and seldom quoted as a percentage.
The all-in cost to investors is almost never the one quoted.
For example, a vehicle described as carrying no management fee can still take 20% of the profits, deduct its formation cost from the money raised before any return is earned, and carry undisclosed ongoing expenses.
Always ask for every charge, what it’s charged on, and for how long.
Long Angle Investments charges no carried interest and negotiates fee reductions from sponsors on members' behalf.
Around Long Angle
A look at recent investments
Long Angle uses the collective scale of its membership to secure private market allocations and terms that can be difficult for individual investors to obtain directly.
Recent investments include co-investments in Anthropic and Databricks, early-stage VC with General Catalyst, a multi-strategy hedge fund with Millennium, and evergreen private equity with KKR.
Published by:
Chris Bendtsen
Insights Lead, Long Angle
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This material is for informational purposes only and is not investment advice regarding any security or investment strategy. Long Angle does not provide legal or tax advice, consult your attorney, CPA, or tax professional regarding your situation.
Long Angle Management, LLC (Long Angle), is an SEC registered investment adviser firm. Registration does not imply a certain level of skill or endorsement. Investing involves risk, including potential loss of principal. Past performance is not indicative of future results.