Understanding special assets and interests requires time and advice from the pros

Managing real estate, farm operations and other closely held interests or special assets is no easy task for the inexperienced. Here are some things to remember when seeking services from an asset manager.

Q. What do special asset managers do for people?

A. When called upon, we put professional resources in place to manage all kinds of ongoing enterprises, including oversight of family-owned businesses. Professional asset managers can take care of real estate assets such as farm acreage, residential real estate, office buildings and timber properties, as well as mineral assets, including oil and gas.

Q. When is it a good time to engage the services of a special asset manager?

A. Usually when your business is in transition, whether that is prompted by a change in ownership, a death in the family, or some other major event that causes a disruption in normal operations. In the case of a closely held firm, for example, an appointed family member or trustee involved in a transition may be inexperienced in business operations and find themselves overwhelmed when held responsible for day-to-day business activities.

They may not possess the industry knowledge to keep the business operating smoothly, and the special asset manager can help facilitate.

Q. What should someone look for in a special assets manager?

A. I recommend looking for a firm with the professional experience to purchase, profitably manage or sell these types of assets under one full-service money management roof.

Q. How do people usually acquire their special assets?

A. Owners acquire special assets in a variety of ways – some build them from the ground up, while some may acquire them through purchases or generational transfer. If a business owner of any enterprise retires or suddenly passes away, the burden of operations can sometimes fall on family members who may not be prepared or want to carry on in the same way. Businesses involving natural resources, such as farming, forestry and mineral interests, require special expertise. That’s often the time when people seek help to continue business operations or determine an appropriate transition for their family as they see fit.

Q. How have past clients profited from working with a special asset manager?

A. A married couple with a large farming operation was faced with some tough financial choices recently when the husband suddenly passed away. The wife faced the prospect of having to take over the operation of several thousand acres of farmland worth millions of dollars. She had a deep empathy for the many long-time business partners who had been her husband’s key tenants.

The wife decided to bring in an agent to assist her in reaching her goals for the property. As not all the interested tenants could immediately raise the funds to purchase the parcels, so an outside agent was enlisted to sell and auction portions of the acreage, using their experience to derive the most value for the family. At the same time, this created fair access to the pool of potential purchasers the wife desired.

The sheer scope of managing this process made it a complex job. In many cases, it’s simply too big a task for a single person or someone not accustomed to dealing with large-scale operations. It helps to have the guidance of an experienced team.

Roger Kummert is the Commerce Trust Company Real Estate and Special Assets manager.

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