Bernard Arnault’s recent real estate purchases in the United States have been making headlines. Interestingly, his family office uses the services of BFKN, a commercial real estate and business planning legal firm, to handle their real estate dealings in the region. BFKN is the primary North American real estate counsel for Bernard Arnault, Groupe Arnault, LVMH, and the LVMH brands in the Americas.
In this insight, we explore why family offices choose to outsource, what and who they typically outsource to, and how to determine which services are suitable for outsourcing.
Why do family offices turn to outsourcing?
Family offices often outsource to access specialised expertise, increase efficiency, and reduce costs. Although internal staff may handle day-to-day operations, sometimes external skillsets are required to handle special situations.
A recent research report by Ocorian showed that a significant proportion of family offices already rely on third-party support. The report revealed that 63% of family offices use third-party assistance for managing illiquid assets, such as private equity, while 60% seek help with personal financial management for family members. Additionally, nearly half (48%) receive support for liquid investments.
The study also found that outsourcing allows family office professionals to improve overall service levels (71%) and focus on their core strengths (59%).
Who and what functions do family offices outsource?
There is no shortage of service providers available to family offices. In fact, as the industry grows, more and more financial institutions are opening up segments of their businesses to offer customised solutions for wealthy families.