Family offices are continuing to gain greater popularity as investment vehicles, which we’re always keen to note at Capital Hedge through our FINTRX Platform. New research from by Agreus, the UK family office resourcing and recruitment consultancy, notes that a typical family office holds less than $500M in assets under management, invests in equities, employs at least 20 staff who receive a discretionary bonus, and has operated for over a decade. As such, family office salaries have increased markedly on the previous year, with most surveyed chief executives or managing directors now paid on average more than $389,688, up from $194,845 to $259,791 last year.
Agreus launched its latest research of the sector to about 100 family office principals, executives and advisors at the Lansdowne Club in London on June 29. Despite major global events, including the election of US president Donald Trump and the UK’s narrow vote to leave the European Union, Agreus said it was seeing “positive results” from Brexit in the UK, which in turn had positive impacts on ultra-high net worth (UHNW) financial positions.
The consultancy’s third annual benchmark survey of more than 250 family office clients and contacts found the majority of 36% employed more than 20 staff while 25% employed under five staff. The sector appeared well founded in the UK, with 52% of family offices having operated for more than 10 years and 29% for six-10 years.
Agreus said it had seen an influx of new family offices from resident non-domiciled clients, particularly from emerging market countries. While an expected 28% of families originated from the UK and 26% from Europe, the third most common, at 14%, came from the Middle East, ahead of North America. China, India, South East Asia and Africa each were the origin of up to 5% of families.
Researchers found the size of AUM among those surveyed was consistent with the global percentage of wealth. The majority of family offices surveyed had AUM of less than $500M with the second largest, at 22%, managing $1B to $2B. A sizable 14% of FOs surveyed reported more than $5B in AUM.
These offices also reported investments across a wide variety of asset classes. Equities (91%), property (86%) and private equity (85%) were the most popular asset classes for family office investments. The report pointed to the drop in value of pound sterling as a driver for the increase in family office investment in equities and UK property. The report also noted that “overseas investors took the opportunity to purchase small to medium-sized companies through private equity transactions.”
Become a part of the action in the growing family office world through our FINTRX Family Office Platform.