Family Matters

What Is A Family Office?

A family office is a private wealth management firm for ultra high net worth individuals (UNHW). They offer a comprehensive approach to investing, including taxes, estate planning, charity donations, and more.

Ultra high net worth individuals = someone with $30MM+ in investable assets. According to the Wealth Report in 2021, there are more than 520,000 ultra high net worth individuals in the world and ~33% of these individuals live in the U.S.

Family offices can be a single-family office or multi-family office.

• Single-family: set up by a wealthy individual to manage family wealth. Staff includes experts hired by the family to protect their financial interests and access specific opportunities.

• Multi-family: an independent firm that manages wealth for several ultra high net worth families. Traditionally less expensive than a single family office and families have less control over operations.

Investing Strategies

Family offices typically employ more sophisticated investing strategies than individual retail investors.

A recent survey by KKR interviewed 75 chief investment officers at family offices with an average of $3 billion in assets under management. Here are the main takeaways:

• In 2024, family offices have 52% of their portfolios in alternative investments (private equity, venture capital, private credit, infrastructure) compared to 42% in 2022.

• Their holdings in publicly traded stocks fell from 32% to 29% and their cash holdings fell from 11% to 9%. Family offices plan on continuing to move capital from stocks and cash to private investments.

• Henry McVey, head of asset allocation at KKR and CIO of the firm’s $39 billion balance sheet, wrote: “They (family offices) understand the benefits the illiquidity premium plays in compounding capital in a tax efficient manner to build wealth for future generations.”

Investing is a major component of wealth creation.

With the tools available in a post-information age, there are no barriers to investing in a similar manner to billionaire families. Begin your private investing journey today.

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