As the family office industry has evolved, there are an increasing number of family offices with a public presence. Although some family offices still operate under a veil of secrecy, there is a growing trend that as younger generations come into the fold, more of them are electing to have a public presence and/or disclose their investments. In addition to this, it is becoming increasingly common for family offices to invest more directly now than in past years.
Historically, family offices typically invested in traditional asset classes such as stocks, bonds, and real estate through external fund managers or financial institutions. Now, direct investing trends have been driven by the increasing sophistication of family offices and the following:
- the desire for more control over investment decisions;
- potential for higher returns;
- ability to leverage the family’s expertise and network in specific industries or sectors;
- advances in technology and data availability, making it easier for family offices to conduct their own research and due diligence, further facilitating more direct investment strategies. The pandemic helped level the playing field.
Many clients question why a family office would choose to make their presence public when for years they have been so secretive. Below are several compelling reasons:
Attracting new clients
A family office with a public presence can raise its profile and attract new clients who may be interested in its services. A great example of this is Rockefeller Capital Management, which was founded by the Rockefeller family and invests in a wide range of industries, including real estate, energy, and healthcare. In partnership with Rockefeller Capital Management is Jeter Reich Wealth Partners, who have also expanded on the services they are providing to other family offices.
A public presence can enhance a family office’s credibility and reputation within the financial industry and among potential clients. Through their services and lending initiatives, London-based Conrad Family Office shows how this credibility is developed, to better serve the family office, as well as its clients.
Networking and co-investing
A public presence can provide networking opportunities with other family offices, financial institutions, and investors. Many family offices are looking to align themselves with other family offices, either to pitch their own investment opportunities, offer their family office’s services, team up for co-investing or simply rely on a particular family for the expertise needed for due diligence in less familiar sectors. Family offices collaborate to share best practices, co-invest and advocate for common issues or interests. Collaborative efforts help to mitigate risks and increase efficiency by reducing duplication of efforts and enabling more efficient use of resources. Steady Capital is one such example of this, as they are committed to adding value to the equity investments and joint ventures they partner in. Through their real estate analysis, they’re able to focus on where their capital and skillset can add the most value and generate elevated risk-adjusted returns for stakeholders.
Access to deals
A public-facing family office may be approached with investment opportunities that may not be available to private family offices. In the past 5 years, more families have been looking to be added to public directories for this reason.
Family offices often come together to collaborate in philanthropic initiatives and a public presence can also provide more opportunities for charitable efforts and community involvement. Family offices make a bigger impact when working together and often have similar investment goals, values, and interests. By pooling their resources and expertise, they can achieve greater scale, diversification, and impact. Family offices that operate in the public eye may find it easier to source investment initiatives that match their purpose and values.
How are family offices raising their public profiles?
Technology and social media are accelerating the need for a public presence. Today, having a website is considered standard practice for most businesses as it provides an essential channel for communication, information sharing, and networking with potential clients, investors, and other stakeholders. Family offices today have sophisticated websites with detailed information about their investment strategies, team members, and additional relevant information.
By connecting with the right kind of service providers who work closely with both fund managers and start-up founders, family offices can find investments well-suited to them and their values. By accurately depicting the office’s investment interests, a service provider can bridge the gap and create better alignment. Opting for high-touch services, that work with the family office to optimise their profiles for better alignment and accuracy increases the success rate here.
Family Office List aims to serve both fund managers and start-up founders looking to connect with well-suited family offices. They believe in the power of leveraging technology through data-driven information to help clients connect more efficiently and effectively. The platform’s filters allow targeting prospects based on their investment objective to encourage working smarter, not harder. In the past year, the platform has seen a 23% increase in new firms added to the list and currently has over 4,300 family offices registered.