1. What is a family office?
Whether it is a single or a multi-family office, the overall purpose is to grow and transfer wealth over generations. In addition to investment management, they often provide a breadth of concierge service which eclipse any single stand-alone service required by ultra-high-net-worth (UHNW) families. In this guide to family offices, we’ll break down exactly what these services include, which can range from philanthropy to property management.
The average wealth for ultra-high-net-worth families operating family offices is around $100 million in investable assets, with the company’s financial capital being the family’s own wealth. However, there is an emerging market of multi-family offices that serve a historically underserved segment – the sub-$100m category.
Family offices are a unique breed and tend to be incredibly opportunistic when it comes to putting capital to work. Where the average institutional investors require longer and more protracted due diligence cycles, family offices have significantly greater thresholds for longer investment hold times.
What was once a niche industry focused mainly in the United States, has now gone global. Over the past two decades or so, family offices have rapidly evolved, thereby changing the way in which the ultra-wealthy manage and allocate capital. An increase in private wealth has continued to expand the creation of new family offices in areas that were essentially void of them in the past.
However, like any vertical dealing with the ultra-wealthy, each family office is unique in set-up and structure requiring a different combination of services. What’s more, as a new influx of wealth owners enter the market and family offices ‘come online’, diversification of wealth categories is starting to take place. Tech wealth is growing twice as fast as other private wealth, leading to an increasing number of entrepreneurs establishing family offices to manage and professionalise their capital.