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Making Sense of the Family Office Investor World

June 15, 2017 | Kathleen Leahy

Making Sense of the Family Office Investor WorldIf you’ve just recently found interest in the family office space, you’re in the right place - our FINTRX Family Office Platform brings together data on single- and multi-family offices all across the globe. These family offices are private firms of various structures, sizes and responsibilities which manage the wealth, investments, trusts and just about every aspect of one or more family businesses with net turnovers of more than $100 million a year.  It can be difficult to find information on them, seeing as many single- and multi-family offices fly far under the radar, some not even having a published phone number or a Web presence.

However, it is worth learning more about these deliberately discreet, usually expensive, but powerful entities which are growing in popularity in the global ultra-wealthy family business community.

As controllers of $4 trillion of capital for some of the richest families on the planet, the significance of family offices should be appreciated. From investments to family member schooling and foundations, FOs will often do in-house what many people would access from external providers. Members of the family will often be closely involved, but again, it depends on the setup of a particular family office. Common purposes are to protect and steward the family and its wealth. This will typically involve managing a portfolio of investments as well as running several administrative functions for a family.

Although no official definition of a family office exists, there are three camps overall:

·         A single family office (SFO) will look after the interest of one family, although this may sweep up several family members or branches.

·         A private multi-family office (PMFO) will cater to the interests of two or more families, but will not be looking to grow that number commercially–although perhaps organically.

·         A commercial multi-family office (CMFO) will be looking to represent multiple families and grow that number. They may offer family office services such as insurance, transition advice, philanthropy, executive travel as well as investment opportunities.

What's more, family office investments will often be over a longer time span than other investors, such as venture capital, making FOs attractive to entrepreneurs in particular. Family offices may wish to work with other families to do deals and learn from other families at events.

As well as characteristics, there are several issues FOs work on. These include family dynamics­–a family office can help bring a family together, but there may also be succession issues as well as competition for influence and roles. There is also the question of family office regulation, the wealth needed to run a family office and an increase in FOs setting up outside of traditional western countries, for example in India and Singapore.

Learn more about the growing world of family offices with our FINTRX Family Office Platform.

Source: http://www.campdenfb.com/article/unlocking-family-office-know-your-sfos-your-mfos-and-cmfos

Tags: family offices Direct Investments Alternative Investments