How award-winner opens the door to institutional-grade private market opportunities

James Burton 00:00:00 

Hello everyone. My name is James Burton, Vice President of editorial here at Investment News. Thanks so much for joining us. And today, I'm delighted to be joined by Thomas Ruggie, founder and CEO of Destiny Family Office. Tom, thanks for joining us. 

Tom Ruggie 00:00:27 

Thanks for having me. It is absolutely my pleasure and looking forward to the conversation now. 

James Burton 00:00:32 

Tom had some recent success at the 2025 Investment News Awards, where he was named Advisor of the Year on Alternative Investments. I was there. It was a fantastic night at the Edison Ballroom in Times Square in New York City, and it was great to see Tom in the media room afterwards. Just moments after he stepped off the stage, here's the announcement from the show. 

Speaker 1 00:00:54 

So this is Advisor of the Year, Alternative Investments, and the winner is Thomas Ruggie, Destiny Family Office. 

Tom Ruggie 00:01:15 

All right, so I'm not going to thank Investment News like everybody else does. Just kidding, actually, Investment News, thank you so much awesome. Want to thank my team, many of you who are here tonight, thank you so much for everything you do. I want to thank my family for putting up with all the travel and hectic work schedule my wife here tonight, Kim, and want to say congratulations to everybody sitting here, because it's amazing to be here, and you all deserve to congratulate yourself. Thanks. 

James Burton 00:01:54 

So just as a follow on to that, today, we're going to dive a little deeper into what makes him such a great proponent of alternatives, especially when it comes to collectibles, an area that we featured Tom about in Investment News and about his access to the private markets. So without further ado, I'm going to dive in. I'm going to focus first on collectibles, if that's all right. Tom, this is obviously an area that you've carved out a very notable reputation on is start off. You know, perhaps for those who are new to this area, investments, how, if at all, do economic cycles consumer sentiments affect the value of collectibles? You know, how, for example, can a vintage car collection fit into a diversified portfolio? 

Tom Ruggie 00:02:43 

Well, first of all, before, before I answer that question, James, I want to go back to the event in New York, which you did interview me afterwards, and I was beaming from ear to ear. Candidly, I had no expectation of winning the award. And it was an amazing honor. It was very humbling. And now, you know, we're making concerted efforts. We literally at the top of one of our marketing sheets have, how do we repeat and win the award again in 2026 so that is certainly part of our initiative. But thank you for mentioning that you know regarding the economic cycles, and you know, like, how does, for example, a vintage car fit into that? I mean, you know, there's some discussion that having collectibles in a portfolio not only provides diversification from a traditional portfolio, but the it is not impacted from an economic cycle the same way. And frankly, I would, I would, I would disagree with that a little bit. You know, look at 2008 for example. You know, obviously the market was down, the economy was down, and so were collectibles. You know, as as you know, I'm a big sports memorabilia collector and and I was able to purchase, in late 2008 some of my most prized possessions currently probably at a 60% discount of where they would have been a year or so earlier. So I There certainly is still economic risks. But I think one of the biggest differences is, and I say this about real estate as well, is, you know, in the publicly traded markets, you know, you have the ability to, on a daily basis, see the ups and downs, and if things are trending down, people get scared, and people make, you know, adjustments that doesn't necessarily happen in assets where you don't have a live gage of what the value is on an ongoing basis. And you know, regarding the question about, you know, a vintage collectible car. 

Tom Ruggie 00:04:30 

You know, one of the things that I really talk to clients about when it comes to collectibles is, you know, is it a collectible? Is it a passion asset, or is it part of your actual investment portfolio? And using me as an example, it's actually somewhere in between, because I know that some of my assets. Assets are for all intensive purposes, investments, and they're they're appreciating over time, but at the same time, at least at this stage of my life and career, I'm not really looking to sell those assets. So you know, there has to be some context behind is this vintage car that, yes, you could put on your balance sheet, and yes, it may be worth a lot of money, but are you planning to pass that down to your son or your grandchild? And you know that that's part of what us as an advisor, helping our clients, you know, really needs to address. 

James Burton 00:05:34 

Yeah, interesting, going back to that value element of it, which is obviously, you know, Central for a lot of people, you know, how do you how have you done this? How do other advisors get in that position where they can assess that long term value of a collectible, whatever it is, whether it's a sports card or a vintage car or whatever? 

Tom Ruggie 00:05:56 

Well, it's a difficult proposition. It's difficult for me as a collector to constantly address value and there in depending on what the assets are. You know, bottom line is, it depends on what the same or similar assets have sold for. You know, most recently, as an advisor, I think that the difficulty is even more and frankly, most advisors, certainly on the private channel, probably don't pay a whole lot of attention to the collectibles of high net worth and ultra high net worth individuals. Yet, for ultra high net worth individuals, collectibles typically are 20 to 30% of their overall portfolio value. Now, again, that doesn't apply to everybody, but as a generality, it does apply. And you know, candidly, most advisors are not charging for any oversight on that, so it really gets ignored when it should be a pertinent part of of the overall equation. And why talk about private advisors? You know, because, you know, some of the big wire houses, they have separate divisions that focus on collectibles. So, you know, an advisor with one of those organizations can turn to some specialists within that organization. But from a standpoint of the, I think, 16,000 RIAs in the country, there typically is not much of a sounding board, and it is probably often overlooked. It's something I speak about very frequently across the country. 

James Burton 00:07:29 

This is a little ad there. Tom, is that something you've benefited from? Then, given your you know, your experience in that area, do you find that you've there's been a gap in the market, I guess, for someone like you who can embrace those questions about collectibles, 

Tom Ruggie 00:07:47 

You know, I think I've benefited in some, you know, outside ways more so than direct. I mean, for example, to what extent the collectibles had to do with, you know, earning, earning this award. I think that's a, you know, a very tangible benefit for a lot of the work and effort that I've put into bringing collectibles top of mind to other advisors. You know, from a standpoint of client base, you know, we have a number of high net worth and ultra high net worth clients that that have collectibles. But, you know, my speaking to the financial world hasn't, hasn't brought a banging the doors down for new business. I've really been doing it more for a passion standpoint, and to bring awareness to, you know, to others out there, really, to try to help other advisors to not only evaluate these assets as part of of a client's portfolio, but but the fact that that I think some of these assets really have have transferred over the years into being an investment class in and of itself. 

James Burton 00:08:54 

It's interesting that you know the word passion, you know, comes up a lot with the collectibles, which, you know, people always talk about taking the emotion out of investing, right? I just wonder, with that in mind, you know, that personal emotional element which can sometimes be involved in this What are you? What are the risks or unique characteristics in this area that you find yourself educating clients about? 

Tom Ruggie 00:09:21 

Well, I mean, there's, I think we'll talk a little bit about alternative investments, aside from collectibles also, but there's, there's similar risks. I mean, there's, there's liquidity risks. You know, again, if, if you want to sell a game used Babe Ruth bat in 2008 which is what I was fortunate to purchase in 2008 you're not going to get the value that you would have received in 2006 or 2007 yet, using that that same example, still, that bat for me has gone up probably 600% since I purchased it in 2008 so you. And, you know, everything's timing, and it really boils down to is the mindset to buy this as an investment with a point in time that you're going to look to sell it, hopefully for a profit, or are you buying it as, hey, I want this to have investable type returns. But the reality is, it's such a passion of mine that I'm not looking to sell it in five years or 10 years or 20 years. So, you know, James, one of the things that that we do just within our financial planning process is we use a bucketing approach. And there's three different buckets. The first bucket is conservative. The mid bucket, at least for me, is is more publicly traded investments. And then that third bucket, which is really money that we're saying statistically shouldn't be necessary for the next 20 plus years, that's, that's where we look to fulfill, you know, the collectibles for the clients that want to be in collectibles. And I want to make the point clear that we don't go to clients that are not collectors and don't have a passion. Say, hey, you need to input this into your portfolio. 

Tom Ruggie 00:10:56 

It really should be something that you're interested in, because then you don't have to worry so much about, hey, when can I get my money back on this? But again, that that that third pool or third bucket is is for the collectibles, it's for the alternative investments, it's for the assets that you know, going back to answering your question, don't have the same liquidity, don't have the same transparency, can can be more volatile. You know, all those factors are indicative of these types of investments.

James Burton 00:11:42 

Yeah, thanks so much. Tom I mean, it's such a fascinating area of wealth management now, and really interesting to hear your thoughts on that. Just want to broaden out a little bit, obviously, into, you know, more of the alternative space that you've been recognized for, for your work in, I should say, you know, private markets, especially, you know, it's a, it's a, it's a trendy thing to talk about in recent years. From your perspective, how have you opened the door for your clients to institutional grade private market opportunities? 

Tom Ruggie 00:12:15 

Well, you're right, James, it's been a very hot area, and certainly within our business, a probably the strongest growing area of our business. And, you know, I mean, we've been very fortunate. We get deals for direct investments to, you know, companies such as Anthropic, which, you know, we're almost going to triple in value from an investment made six or seven months ago based on the the raise that they have coming up, probably in August or September. But we've been fortunate to get Anthropic and Andrew and Databricks and x ai. But you know, we get the we get our deals. It's, it's somewhat of a trickle down effect, with us being the lowest level. So we get our deals initially from come from from private equity firms that are either participating in the current raise or have participated in past raises, that are holding assets on their books and they're looking for some liquidity. And this gets passed down to a firm that we've had a relationship with now for five plus years, and we're able to effectively piggyback on, on what, what they're doing, and offer these, you know, amazing opportunities, in my opinion, very unique opportunities to our client base, and that that client base that we're offering this to has expanded significantly. We're putting a lot of work and effort to to expand who we offer this to, but it's also, frankly, been one of the easiest endeavors of my career, because I'm not going to somebody like you and saying, hey James, you know, let me talk to you about our wealth management firm or our family office. It's more. 

Tom Ruggie 00:13:54 

Hey, James, do you have an interest in these types of opportunities? And to your point, and we focus on on qualified purchasers, so $5 million investment net worth and and as a generality, people that have higher net worths are extremely interested in having the opportunities to buy these, these, we're mostly offering late venture capital type investment opportunities and, and by the way, it's, it's been a blast going through it, and we have been busting our tail because we've almost on a monthly basis, we're doing a new raise and, and there's a lot of work and effort that goes into it, but at the same time, it's, it's been, it's been just so much fun. 

James Burton 00:14:46 

Is there one, one of those opportunities that particularly stand out to you as maybe most enjoyable, or maybe a particular sort of game changing raise that that you were part of? 

Tom Ruggie 00:14:59 

Yeah. Well, we've had, we've had a couple of wins already, which, you know, you always love talking about the wins, but I'll give you an example. We were able to purchase Reddit at a significant discount in November of 2023 at about a 50% discount of what their previous raise was, and then it went public in March of 2024, we effectively at the at the date of it going public, we had doubled the money in roughly, you know, four months, and then within 678, months, it had reached a high of somewhere around $224 which was more than 7x ing our initial investment less than a year earlier. So, you know, it's great to talk about the wins. I can knock on wood and say we have, we've yet to have a loss, but at the same time, that's something that we're very open to our clients about is, is every opportunity that we're looking at looks fantastic right now, but you just never know when, when a black swan of any type is going to happen that has, you know, either an impact from a standpoint, where you don't make any money, that's that's best case scenario for a Black Swan, or you lose a little bit of money, or you lose everything. And we're very transparent to our clients that it's important to invest in these and invest in a diversified portfolio, try to get at least eight or 10 different holdings, because again, everything looks fantastic until it doesn't. But what we're buying, we've been fortunate to have access to we're, again, we're super excited about where, where things are going. A lot of AI focus, obviously. And, you know, have my thoughts on on AI and how that's already changing the scope of what we do, and how it's going to continue to change, not only how we operate, but but the investment landscape. So it's very exciting stuff. We're at a we're at a great moment in time right now. 

James Burton 00:17:07 

Well, I'm intrigued. Tell me a little bit about AI. I mean, every company is, or should be, arguably, looking at how it's changing, maybe not just their setup of the the world without being too grand about it, but what, from your perspective and what you are for your clients, where do you see AI going? What are the opportunities that are presenting themselves? 

Tom Ruggie 00:17:37 

Well, again, I think, I think we're fortunate to be investing in AI companies before they're, they're public companies. And I don't want to overstate this or make it more grand than it is, but you know, to me, this is, you know, we're, we're right now we have some opportunities of, you know, buying Microsoft before they are public, or buying Amazon or Google before they're public. And again, that may not hold true when all is said and done, but I think that there's, I think that there's a clear overlap between where we are in the AI world versus where we were in the mid 90s in the internet world. And frankly, I think the AI is ultimately when all said and done is going to have grander results than even the internet. And yet, you think about where we were with the internet in the mid 90s and where we were today. I mean, it's it's just the growth is, if you truly look at it, it's unfathomable. But you know what, if I had my crystal ball James and my crystal ball doesn't always work, but, but, you know, if I had the crystal ball, I I said coming into this year, it was my personal prediction that this is going to be the year that the majority of individual slash investors, at least knows what AI is. And at this point, I think that's already taken place. To me, the next step was a large majority are using some form of AI. And frankly, I think that's really taken place faster than I would have expected it to as well. I mean, I would imagine most listeners to this, you know, are using chat, GPT or Claude or something along that line. 

Tom Ruggie 00:19:15 

So what I see happening, James is, I think, I think the next one to two years is going to be an amazing, robust period of time where AI carries things just like the internet did in the late 90s and and that creates amazing opportunities, not only for what we're doing, but even public companies as well. I mean, we love public companies that are investing in AI and the mag seven is a great example of that. The downside to this, again, if my crystal ball is correct, is that I ultimately see the same outcome as the internet, meaning that you. So when things start propelling at such a fast pace, it brings greed into the marketplace and and I believe greed is going to propel AI, you know, pardon the pun, but to, you know, to astronomic levels, only to, at some point have a significant pullback in the investments and in the market, and very similar to what happened to the internet and again, long term, I think the same, the same outcome is going to be there is you're going to have great companies that survive this that you know, might have lost 30 or 40% you know, in on the downside, but long term, those companies are going to last, and then then you're going to have a lot of of companies out there that, you know are offering a product that simply is just not going to cut mustard. And there's going to be, you know, a lot of loss. And also, you know, there's going to be loss on people's balance sheets, because most people, you know, do you buy high and sell low, or do you buy low and sell high? And unfortunately, most people buy high and sell low. And I do think that's, that's what my crystal ball says, 

James Burton 00:21:12 

Yeah, no, it's fascinating. Just a word then. So we've talked, you know, we talked earlier, illiquidity, different people's time arises. We talk about the relationships you have that kind of unlock some of these opportunities. And we talk about here about, like, the, you know, the trend, if you like, the surge of AI, I mean, it's a, it's a, it's a defining moment in society. So just a word, if you don't mind, the due diligence that you then have to do to kind of unpick all of this, maybe just give us a little insight into, in, into what you do, so that you, you do the research you do, you protect your clients as much as you can. Because you, I know you talked about, you know, there's no fail safe solution. 

Tom Ruggie 00:22:01 

Well, I'll get back to the due diligence, but it goes back to what I said earlier, kind of the trickle down approach. But, you know, I think from a due diligence first and foremost, of taking care of our client base is is helping them to understand the risks. And we've already talked about some of these risks, but, you know, understanding that, hey, we think some of these companies could go public in two or three years, but something might happen, and it might be 10 years and and by the way, you don't have, or you may not have, the ability to cash these assets in until there's a liquidity event. That's a risk, and if you can't afford that type of risk, you should not be investing in these products. You have to understand the the transparency risk. You know you can, you can look up a public company anywhere and find out virtually everything about them. But that's not the same with private companies. So there's, there's, there's a leap of faith to some extent, that that has to be made in investing in these private companies. And again, one of the big things that I really harp on with our with our client bases, is diversification, because as as great as a company looks today, so much can change prior to a potential liquidity event that that could have an extremely negative impact on that. So, you know, in a perfect world, you have a portfolio of 810, or more companies, and perfect world, everything goes great with all of them and and, you know, you hit a bunch of home runs, but, but the reality is, that's probably not going to happen. So you don't want to put all your eggs in one basket and hope that, you know, Company X, Y, Z is the company to invest in. So that being said, I think that's the due diligence that really is more of a conversation with our clients, to make sure that they understand what they're getting into. They understand the risks. 

Tom Ruggie 00:23:42 

And then, you know, we talked about this earlier, but from a due diligence standpoint of actually evaluating the investment itself. I mean, even for us, it's somewhat of a leap of faith, because if you go up that same ladder, we're relying on on a company that has more access to information than we do to do their due diligence and say, Hey, Tom, here's a great product offering for your clients. And here's the DAT, here's the research that we've done. But then they're also going up the ladder. They're getting these deals directly from private equity firms that that you know, inevitably for them to invest hundreds of millions of dollars, are doing a lot more due diligence on a private company than than we would have the capabilities to do ourselves. So again, it's, it's, it's marvelous to have access. We're very, very fortunate, but, but there's we, we discuss this with our clients. There's a little bit of a leap of faith that has to take place in investing in these types of investments. 

James Burton 00:24:54

Yeah. Thanks. Tom Great answer. My final answer is a bit of a final question. Sorry, it's a bit. Of a feels like bit of an existential question for a wealth manager. But, you know, public, public versus private, I'm intrigued. Where are we at, given what's happened the last few years we've talked about, you know, it's a increasingly popular part of people's portfolio, but where are we at with like, the portfolio mix, typically, and what do you think is going to happen next? Your crystal ball, again, private markets. Are they going to get more portfolio share in your average high net worth client? Do you think? 

Tom Ruggie 00:25:32 

Yeah, so it's a great question, and there's not a standardized answer. You know, private investments, whether it's direct investments, like what we've been talking about, or even investing in private equity firms. You know, it's becoming more and more available to everybody. You know, we offer an alternative investment fund for accredited investors, and it provides our clients the ability to get into a fund that has mostly qualified purchaser investments in it. But we've also found out that for that, let's call it one to $5 million client, that there's an awful lot of education that needs to be done for them, because they're not used to investing in these types of assets. They're not used to getting a k1 which is inevitably going to hold up their tax returns. So that was an early learning curve that we had to adjust and adapt to. And as a generality, to answer your question, that you're kind of in that one to 5 million range of investable net worth. We're probably comfortable in the 10% threshold for alternative, more non liquid type investments. Of course, depending on the client, their situation, their income, there's a lot of other factors. But as generality, I would say 10 to 10% the next level up, kind of, what I'd call the five to $20 million space. I think we get comfortable with somewhere between a 10 and 20% type allocation to these investments, again, still dependent upon personal situations. For, you know, any any particular client, and frankly, for our higher net worth clients, and I don't even mind saying this about myself and my portfolio, you know, going back to our strategy of using three buckets, and bucket three being money that we're statistically saying shouldn't be necessary for the next 20 years, for clients that fit that type of a definition, such as myself. I mean, we run the allocation very much like an endowment type allocation. 

Tom Ruggie 00:27:12 

You know, we want as much money in that first pool as necessary. You know, more conservative liquid available for income needs or whatever this the second pool, 11 to 20 year money is typically the public markets. And then, you know, we're running for some clients, anywhere between 20 and 40% in alternatives for the ultra high net worth, certainly not all in in single company, direct investments, but but definitely a higher allocation, again, on a per client basis. I mean, we have clients that have that net worth, that that don't have anything there, because there's not a comfort level of those types of investments. So it's an educational process, but we are definitely seeing within our practice a much higher use of alternative investments as part of the portfolio.

James Burton 00:28:37 

Don't what a great way to end. Thank you so much for joining me today, and congratulations again on your Investment News Awards win 

Tom Ruggie 00:28:45 

Well, James, thank you so much for having me. And again, it is one of my major goals to be having this similar conversation a year from now. So hopefully, hopefully we make it happen. We do have pretty big plans to continue to expand what we're doing on the alternative side, so we will execute those plans, and hopefully it's worthy of at least a shot at being a repeat for this award. Fantastic.

James Burton 00:29:14 

Thanks again Tom, and thanks everyone for joining us today. We’ll see you next time. 

Tom Ruggie 00:29:19 

Thank you, James. Take care.