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Family Offices Continue to Grow

Family offices continue to grow

Family offices are increasing in number and in influence, with a rapid increase in assets.

Ernst and Young estimated in its 2016 Family Office Guide that there are over 10,000 single family offices around the globe. At least half of them have been set up in the past 15 years.

Around 2,350 family offices around the globe have at least $50 million in assets, including single-family and multifamily offices, according to FINTRX, a family office data and research firm in Boston.

FINTRX also reports the offices on its platform manage an average of $900 million in assets, an increase of 38% over the past year.

A typical family office has a longer investment horizon and looks at 75-100 deals a year. Additionally, more family offices are also looking at impact investing—investments for profit that also aim to have positive social outcomes.

Some family offices are taking advantage of the 2017 tax law changes and taking part in the Qualified Opportunity Zone programs.

Why the growth in these family offices?  The rich are getting richer because of low interest rates, a sustained economic recovery and a long bull market on Wall Street.

For instance, Spectrem Group reported in 2018 that households with a net worth of $5-25 million were up 32% from five years earlier.

Greater wealth creates more complexity and the need for a family office.

 

Family offices and philanthropy

Signs point to continued growth in this arena, which is important to note since many offices also manage the family’s philanthropic giving.

The Global Family Office Report 2016, created by UBS and Campden Wealth from surveys of 276 family offices, found that 50% of those in North America have a clear strategy and focus for their philanthropy, with another 8% involved in philanthropy but without such clarity.

These families have found charitable giving is a way for multiple generations of a family to engage around a common cause that looks to solve problems and benefit others.

The beauty of family generosity is that it’s not just for those with a family office—generosity is for all, regardless of net worth.

Bill High, CEO of The Signatry, can be reached at bhigh@thesignatry.com, at thesignatry.com or through the contact form on this site.

 

Related posts:
Growing A Generous Family
One Simple Key to Passing on Your Family Vision
How to Build the 100 Year Family

Photo by Haley Phelps on Unsplash

About Bill High

Bill is CEO of the Signatry: A Global Christian Foundation. He works with families, individual givers, and financial advisers to share the foundation’s message regarding biblical generosity and charitable giving. » Learn More. He is the co-author with David Green of Giving It All Away and Getting It All Back Again: The Way of Living Generously.

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