Introduction
Following on from the success of the first Family Office Guide, which was published in 2021, Bloomberg has again collaborated with FBN (Family Business Network) to create an insightful, portrait-style guide to family offices.
Family offices are entities set up to manage the assets of ultra-high-net-worth individuals and their families.
Usually safeguarding assets of US$200 million+, family offices are often formed when a well-established family business is sold or has a liquidation event, or when a family wishes to restructure its approach to its wealth with the aim of managing and growing the resulting assets in an organized, effective, and regulated way. In this context, families aim at organizing their “Total Capital Management”, including legacy, financial, human and social capital.
Family offices are either single family offices that manage the assets of one family, or multi-family offices that manage the assets of several or many families, or the branches of a big family with multiple offices under the one roof.
There are thousands of family offices around the world. In the United States alone, there are an estimated 7300+ family offices. Elsewhere, family offices in Singapore grew five-fold between 2017 and 2019, to more than 1,400 today.
This report draws on in-depth interviews with five diverse family offices from Canada, Chile, the United States and Venezuela.
Each office’s origin story, visions and goals and structure for governance and operations are distinct. All were established to protect family wealth generated through business activities for current and future generations. Some were founded some decades ago and are being evolved by later generations, others have a more recent genesis.
Well-established family offices are now being overseen by the third, fourth or even fifth generation of a family, particularly in Europe and the US. Others, more often those in Singapore, Hong Kong and China are younger and typically involve the first or second generation of a family.
Just as no two families are the same, nor are any two of the family offices we spoke to the same. Some are headed and run by the family, others are staffed by professional investment managers and financial advisers, while others outsource key roles or functions. Some prioritize liquidity; others focus on philanthropy; yet others focus on growing their investment portfolios to complement existing businesses.
What they have in common is a desire to protect and retain their family legacy and wealth in honor of the hard work of previous generations, and so that future generations may thrive and experience continued prosperity.
Insights are presented in seven sections:
Designing & establishing a family office
What type of family office is right for your family, and when is the right time to establish one?
Building an effective team
The importance of having the right people in the right roles in your family office.
Managing & overseeing assets & investments
Different approaches to managing and growing wealth.
Protecting the family legacy
Doing the groundwork to ensure your family office continues to thrive.
Getting the technology right
Identifying the most relevant and appropriate systems and sources for information, data analyses and protection.
Locating your office
Choosing where to locate your family office and making the most of its offerings.
Planning for the future
The importance of making way for the next generation.