The history of economics and trade is one filled with associated family interests. Today the story of a family office almost always begins with the success of a family business, or a family member, sets forth a goal to unify the wealth and assets to safeguard and cohesively plan the management and deployment of the assets in custody. Perhaps they merely plan to pass it along to the family. That development depends on the heirs, industry and assets but more or less a central part to wealth is family. Often as family offices make do for heirs and their particular interests they begin to involve the next generation completely.
In North America family offices in the nineteenth and twentieth century centered on businesses built by single entrepreneurs or family members who then began to plan for future generations and over time participated in systematic asset diversification. They were also aided by immigration and wealthy families transitioning to America. Most of these family offices originated in the Northern cities of Boston, New York City and Philadelphia.
Large pools of capital and fortunes made by the likes of the Astor, Guggenheim, Rockefeller or Bessemer families were as much experiments in capitalism as they were chance encounters with industry and society, resulting in unfounded wealth. Over time the fortunes added up, with some paying particular interest to generating the largest of fortunes. Rockefeller and Morgan created a network of trusts concealing ownership in companies and partnerships. This led to the term anti-trust and trust busting, as officials banded together to bust the trusts, thereby eliminating unfair competition.
The funds generated were so severe and robust they ended up in trust companies overseen by sophisticated organizations compiled of attorneys, bankers and management professionals. Managers did everything from creating trust funds in the classic sense (to hold property for the benefit of another) to picking single name equities for investment speculation to financing ventures and establishing mortgages for family members. These professionals and managers worked for the capital at hand and the capital was in-house. It was permanent. It is debated between J.P. Morgan, Henry Phipps, Jr. and John D. Rockefeller as to who organized the first American family office solely devoted to managing family funds.
Regardless, these family office ventures proved successful and efficient and a new type of money management was born in the United States of America: the single family office.
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