We heard it from the dais. We heard it at the coffee bar. Over cocktails, we heard it on the evening’s breeze as sunset spilled over the deck. Smart family offices were considering making more direct investments, instead of relying on PE funds as investment vehicles, a technique to accelerate growth of family wealth, while avoiding high fees, and, recently, a rather ho-hum record of profitability by several PE funds.

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But How could I do this? And what should I expect as a return?

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Let’s attack these important questions in reverse order. The comments we heard suggested that, overall, PE funds were not providing the exceptional returns their limited partner investments had hoped for. Too often, fees, carries, and failed investments nearly eat up the successes. If yours is doing well—it may be cause for celebration. However, many are not and are stuck with single digit returns. And I suspect it was those firms causing the talk at the recent family office conference we attended. By comparison, angel investors placing funds in opportunities, they selected, have consistently returned about 2.5x on invested funds,or about 20 to 25% IRR in data stretching over the last decade. That’s a BIG difference. Advantage Angels!!! (Of course, the angels are also investing time in sourcing, selecting and managing investments, but still, that’s a BIG difference!!!)

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Which begs the question: How could I do this? Like most everything else, having a plan and a system matters. The data suggest good discipline leads to good results. So here are the steps we believe make sense for family offices seeking to boost returns by increasing their own direct investment activity:

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1. Allocate a small portion of your AUM that is appropriate to high-risk, high-return type investments. Typically, this money is not only at risk, it is not liquid, so the “right” amount to set should consider these issues. If your unsure of an appropriate amount for your office, you might consider emulating some university endowment portfolios where 10% or less of AUM may be allocated to high-risk, high-reward investments.

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2. Consider what type on investments make sense for your office. Software? Service offerings? Manufactured products? Tech companies in general? Cryptocurrencies? Elements in a set of criteria for any potential investments might include: (1) It is a tech (or whatever) company; (2) It products can serve a large market, and they are superior to competitive offerings; (3) It products have sold enough that market fit and pricing seem validated; (4) The company has some solid intellectual property or barriers to entry; (5) It leadership team is experienced and disciplined, capable of executing the company’s business plan; and (6) It has a believable exit or monetization plan within a reasonable time period.

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3. Source and Select Investments, then Deploy Capital. Slowly. Be picky. Better to miss a good one, than hustle your entire allocation into a particular market. Markets change, and investor tastes mature. Temporal spacing is one form of diversification. It might take a year or more to see enough offerings that you are comfortable fully deploying your allocated funds. Until allocation, funds can sit in more liquid investments, so they are productive. As the time from identifying and investment to closing and funding that investment can run from 2 to 3 months on the short side to twice or even three times as long because true due diligence and assurance of criteria match takes time, especially with start-up business opportunities.

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4. Manage Your Portfolio. Some investors are content to sit by the phone awaiting word of monetization. The better policy, we believe, is to actively engage with each investment and management team, working together to address the challenges that always come up, course correct where necessary and allow your active engagement to help both facilitate success AND decide when it is time to monetize. The unicorns will take care of themselves; this applies especially to those in development and to the dogs.

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5. Refine Your Criteria and Adapt Your Technique. In implementing a plan like this you’ll have some big questions and inertia hurdles. And moments of doubt. We all did. The path most likely is not instinctual, but learned. Talk with others and seek continuous improvement. If you’re not quite ready to make the leap, talk to your PE firm about how they do it. They very likely are following a similar path and in doing your diligence on them, you’ll learn and become more comfortable with the system described here.

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6. Be Patient. Your creating a garden, not a night at the Improve. Building to success takes time, and more than a little nerve. But it needn’t be nerve-wracking. Set your plan, Create your system. Tend the garden: Fertilize with attention; Weed out time-sucks, like pet projects that do not really meet criteria, and Prune when necessary.

So we understand why there was talk at the conference about increasing an office’s direct investments and their knowledge of this import source for building long-term wealth. But if the talk is serious, it should not just be wishes on a gentle breeze. The data tell us you can often improve expected financial results with increased direct investment, so it may be time to step up this part of your game.