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How Family Offices Helped Kick Start the Plant-based Meat Revolution

Barry Didato, Senior Advisor at James & Suzy Amis Cameron Family Office

Aug 27. 2019 A number of family offices played a vital role in the emergence of a new industry that has now gone mainstream – plant-based meat substitutes. Now, with some of the biggest players in this nascent market going public and new startups gaining more funding than ever, early investors seem to be poised for a windfall.

After a spectacular initial public offering earlier this year, Los Angeles-based producer of plant-based burgers Beyond Meat is now the largest company in this nascent market. The company’s stock skyrocketed 734% within a few months of being listed on the NASDAQ.

London-based Blu Family Office faced these challenges when it took on a professional athlete as a client. We spoke with the founding principal Christian Armbruester to learn more about the unique challenges of beating the odds.

What are the unique wealth management challenges professional athletes face?
What’s unique about professional athletes is that they face a relatively short period of much higher earnings. This entails a better lifestyle and consequently higher expenses. However, when the career ends, the earnings drop but the lifestyle remains the same. This has brought some sad statistics. In the U.S., nearly half of NFL players are bankrupt within five years of retirement, for example.

Moreover, people tend to underestimate the costs of being an athlete. Most would focus on the headline figure that a celebrity athlete makes, but that’s not the full story. According to our analysis, after accounting for business management, agency expenses and travel costs, the average athlete may be left with only a quarter of that headline figure for investments and savings.

That quarter is left over after the expenses have occurred, whereas the best time to make investment decisions is while the income is flowing in. That’s another unique issue.

What can an athlete do on an individual level to beat the odds and come out ahead?
Wealth management is a bit of an afterthought for most people, not just professional athletes. Most people don’t want to deal with this. Either it makes them uncomfortable or they believe the money will always keep rolling in. This is what makes them put it off until it’s too late. By the time they’re compelled to consider their finances, there is usually less left to work with.

All these risks are heightened for professional athletes because of their relatively short career span. We would like to see them start taking actions to protect their future a lot earlier.

What would you advise a professional athlete who’s just starting?
My advice would be two-fold. Every individual needs to consider their personal finances from an income perspective. Living within your means and not spending every dollar you earn is simple, but pertinent advice. Wealth management works best when it’s implemented at the time the money is being made, rather than after.
Secondly, on the investment side, I would recommend keeping it simple. The biggest investment mistakes we’ve seen people make have come from over-exposure to a risky asset class. By diversifying investments broadly, this risk can be mitigated.

Since we’re talking about celebrities, could you point to someone in the public domain who has managed to successfully implement a wealth management strategy and can serve as a case study for others?
Our anonymous client is actually one of the best examples. Not only did he manage his career really well, but he also planned for his “career after his career,” so to speak. He brought in experienced professionals who he trusted early on. Once we got involved, we helped him diversify his assets and mitigate his risk. Working with his in-house team of advisors made the process smoother. His proactiveness, I believe, serves as the best example for younger athletes worried about their finances.

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