The world of family offices is growing. Rapidly. Wealthy families have always found ways to protect and grow capital - with the savvier among them have pursued their own business deals, from acquiring farmland to seeding hedge funds and buying companies. These days, family offices are gaining popularity, and those who might be turned away by the high cost/low return performance of traditional money managers are shifting to investments they can pursue directly in the family office space instead.
<For families with at least $250 million in assets to invest, family offices have become the preferred vehicle through which to put their money to work, affording complete control and near secrecy. Many family offices keep such a tight lid on their day-to-day dealings that they don’t have publicly available phone numbers, emails, or sometimes not even websites (at the time of this post the FINTRX Family Office Platform estimates that 80% of family offices covered do not have a website). This can make it difficult to locate family office investors, which is where a seamless, integrated database such as the FINTRX Platform becomes highly beneficial.
Since 2011, roughly three dozen hedge funds have converted into family offices after returning their clients' money, according to a Wall Street Journal tally, a clear indication of their surging prevalence. Family-backed investors own all or part of luxury brands such as Jimmy Choo and Four Seasons Holdings Inc. and trendy consumer companies such as Vita Coco, the parent of packaged coconut water company. This, along with the conversion of hedge funds into family offices, is certainly a testament to their worth.
As an example, KKR co-CEOs Henry Kravis and George Roberts asked every employee to come up with five wealthy families the firm could tap for business as the firm looked to kickstart its effort. KKR now counts several hundred wealthy families as clients who have made direct investments, up from virtually none in 2010, said Jim Burns, who leads its individual investor business. Said Burns, “It’s an ocean of wealth.”