the most expensive single life insurance policy in history.
Frances, who runs SG LLC, in Santa Barbara, Calif., helped put together a
$201 million policy for a "well-known" Silicon Valley billionaire in the tech space.
It involved more than a dozen underwriters to put together the transaction.
It was complicated, but
Frances says that's his firm's specialty, addressing "the complex
financial needs" of wealthy people.
"Why would anyone need a $201 million life insurance policy?" I recently
asked Frances over breakfast in midtown Manhattan. He
said there's no more effective way to protect your estate than through life
When you die, he said, your estate is taxed by the government at about 45
percent. If your net worth is $1 billion, then the tax would be in the hundreds
of millions. The problem is that billionaires aren't necessarily liquid.
"The interesting thing about an event of death is this — you're not liquid.
If you're worth $1 billion, you're not $1 billion liquid. You have some stocks,
you have some assets," he said, adding that those things aren't easily
According to Frances, it's the high-net-worth folks who think ahead of time
about the financial situation they'll leave behind.
"Let's be honest. We have a very short period of time here. That's why you
and I are so driven to make an impact. It's our show. The curtain will close.
May as well make an impact and leave a mark and have fun while doing it. Most
people don't think about the after when they're gone ... And because of that,
many people ignore it. 'Oh, I'll take care of it later.' People don't do it.
Sophisticated people do it because they have good advisers."
At such a young age, Frances has drive. He considers his work his hobby. He
loves building businesses.
Frances grew up in Israel, where he shared a bedroom with his three
brothers. His father was an
Israeli IRS agent who inherited a small auto garage outside Tel Aviv from
Frances' grandfather. Frances' father turned the garage into a business with 400
employees and several locations. It could have been Frances' business, but it
wasn't the path for him.
"I would have been wealthy," he said. "I wanted to do things by myself and
live and die on my own sword."
Frances spent 4 1/2 years in the Israeli army (the requirement is 3 years
for men). During that time, he was in the infantry and attended the officers'
academy. He went on to graduate from business school, and
then followed his older brother to Deutsche Bank in San Francisco in June
He was a junior-level bank employee when he woke up and watched the news of
the Lehman Brothers' collapse that September.
Despite the financial-market meltdown, Frances didn't lose his job. That's
because there was one financial instrument that Deutsche Bank had that other
banks didn't — loans. And Frances excelled in selling loans.
However, when the government rolled out the Troubled Asset Relief Program
(TARP), his competitive advantage was destroyed. Other banks had started
extending credit, and his pipeline was gone overnight.
He didn't give up, though. Instead, he thought of a new idea to get clients.
"With that, I needed to figure out a way to reinvent myself as a banker. I
decided to do something no banker has done before — direct letters to people who
are not clients who reside in properties in excess of $5 million."
Frances worked with Deutsche's legal and compliance to draft the letter. He
sent out 2,000 and received two responses. One
of those responses was from Sergey Grishin, a Russian billionaire.
Frances said Grishin's chief of staff saw the letter and opened it. Grishin
thought "Dovi Frances" was an interesting name. That's when the
billionaire decided to reach out.
Frances got an email from Grishin about 3 a.m., saying, "Hey, Dovi, I
got the letter. I want to meet. I just bought this house for $27 million in
cash! When are you available?" They
met that same morning in Santa Barbara.
After, he managed to bring Grishin on board as a client. They did some deals
together, and eight months later Frances left the bank to launch SG, LLC. (SG
stands for Sergey Grishin.)
SG was founded to help wealthy people secure jumbo loans. Since 2010, they've
facilitated $550 million in loans for 450 families. Frances
has built a family office for Grishin. They have an asset-management business
for wealthy families as well as a venture-capital business called SG VC.
This is only the beginning, Frances says. He
plans to continue to work hard so that when he's no longer on this earth his
survivors will also have a better life.
"Hard work pays. It enables you to give better life chances to your
survivors. Your kids, their kids. I want to do for my kids what my dad has done
for me. I want to be able to offer them added value, to teach them discipline,
creativity, and wisdom, while allowing them to go to good schools. Then they can
go and find themselves."
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