Driven by a wave of new wealth created in the last decades, most from tech entrepreneurship, family office investment is reshaping how capital is allocated and deployed worldwide. It’s also completely fair to say that family offices now rival the scale of traditional private equity funds and institutional investors. And with their long-term strategies and investment thresholds, the industry is attracting significant attention.
What is family office investment?
Family office investment refers to an investment strategy or portfolio managed by a family office. Since family offices are private wealth management firms that serve UHNWIs or families, their investments often involve diverse asset classes. These can include traditional investments such as stocks, bonds, and mutual funds or alternatives such as private equity, hedge funds, and real estate. However, what is gaining them the most attention is their direct investments—owning a stake in operating businesses or specific projects—which have created the most waves in global markets. Well, why is that?
That’s because, for better or for worse, family office capital is often considered ‘patient capital.’ This perception is largely due to their investment approach, which is typically long-term. Also, In light of the fact that they are looking to manage wealth for future generations, their investments are highly customised. And new investments are usually chosen with the family’s financial goals, risk tolerance, multi-generational time horizon, and values in mind.
A recent Simple poll on what drives family investment strategy found that:
- Capital growth is the primary driver for 44% of families.
- Long-term preservation is the main driver for 39%.
- Income generation and values or impact alignment were both the main drivers for 8% of families.
We rounded up a few companies that you might find interesting.
PetakSys
PetakSys is a digital transformation partner for single- and multi-family offices, asset & wealth managers providing... Learn more
Northern Trust
Founded in 1982, Northern Trust’s GFO group has a focused commitment to families of significant wealth, their private... Learn more
Northern Trust Family Office Technology
Northern Trust is a preeminent global financial institution that provides asset servicing, investment management and... Learn more
Private Medical
Private Medical is a dedicated and passionate group of physicians who bring humanity, science and a global network to... Learn more
Impact Partners
Impact Partners is Europe’s first impact investing platform. It aligns its portfolio with the United Nations’ SDG... Learn more
SEB Bank
Owned & controlled by the Swedish Wallenberg family since 1856, the bank has an operational presence throughout the... Learn more
Market size & global landscape
While the entire family office industry is growing across the globe, the US remains the most mature and largest market. The total wealth held by family offices stands at an estimated $5.5 trillion. That figure is projected to climb to $9.5 trillion by 2030. Below is where they are globally :