The number of family offices grew significantly in recent years in lieu of an increase in wealth accumulation by high net worth individuals across the globe coupled with aggressive monetary easing by global central banks. Average Assets under Management by a family office stands at 917 Million USD in 2019 whereas the average net worth of such families stands at 1.2 billion USD.
Coming to the most significant trends in the industry, China, India, and Other Asia-Pacific countries are increasingly becoming popular for family wealth managers. Education is the top cause families give to globally, constituting 29% of the average philanthropic portfolio, followed by health (14%), and the arts, culture, and sports (10%).
European families are more interested to fund or donate such philanthropic causes outside their region compared to North American And Asia-Pacific HNWIs.
Key Market Trends
Family Offices Invest Majority Of Their Assets Into Alternatives
Family Offices are prominent investors in alternative assets. The majority of investors target private equity and real estate reflecting wider industry trends across the private capital. Looking ahead to the next 12 months, family offices active in real estate are primarily targeting investment in high-risk/high-return opportunistic and value-added strategies. Family Offices' interest in alternative assets is growing and the proportion of investors investing in real estate has increased 8 percentage points from 2016 to 2019.
Family offices have fewer restrictions and more flexibility than other investor types and therefore have the capacity to deploy larger proportions of their total assets to asset classes higher up the risk/return spectrum. Family Offices' median asset allocations are highest in private equity and hedge funds.
Number of Family Offices Are on a Rise Across The Globe
By the end of Q2 2019, there are 7,300 offices worldwide, an increase of 38 percent in the last two years. North America had the largest share of family offices, with 3,100 or 42 percent of the total, while Asia-Pacific had 1,300 offices, and Europe had 2,300. Emerging markets, consisting of South America, Africa, and the Middle East, were home to 600 family offices. During the last two years, the number of Asia-Pacific family offices rose 44 percent, while in North America they grew 41 percent and, in Europe, 28 percent. The proportion of family offices by AuM are shown below.
The report includes an overview of the largest family offices and a few mid-sized family offices with increasing participation in VC funding operating in the market studied. Each Profiling of the organization concentrates on the nature of family offices, how they finance their operations, services offered, families served, major funding activities and philanthropic donations done, risk profiling, and recent developments in the firm. Currently, some of the major players dominating the market studied, in terms of market share are listed.
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Table of Contents
1.2 Market Definition
2.2 Study Assumptions
2.3 Analysis Methodology
2.4 Research Phases
4.1.1 Factors Involved in the Formation of Family Offices
4.1.2 Structure of Family Offices - Human Capital And Other Costs Involved
4.1.3 Average Family Net Worth and Family Office Average AuM Across the Globe
4.1.4 Proportion of Family Offices Formed Over the Years
4.1.5 Operating Business Of Families, By Industry
4.2 Trends Influencing Investment Strategies And Performance Of Family Offices
4.2.1 Alternative Investments Attract Higher Asset Share
4.2.2 Insights on Impact Investing Of Family Offices
4.2.3 Startup Funding And VC Deals By Family Offices
4.3 Evolving Regulatory Landscape Of The Industry
4.3.1 Family Offices in Dodd-Frank Regulatory Evironment
4.3.2 Impact of FATCA And CRS on Family Offices
4.3.3 Implications of New Regulations For Family Offices
4.4 Virtual Family Office: Technology Adaption In The New Business Landscape
4.5 Market Drivers
4.5.1 Hedge Fund Conversions to Escape SEC Regulations
4.5.2 Growth In The Number of High Networth Individuals Across Regions
4.6 Market Restraints
4.6.1 Over Reliance on Legacy Systems
4.6.2 High Demand For Transperancy Requires More Technology Investments
4.7 Porter's Five Forces Analysis
4.7.1 Threat of New Entrants
4.7.2 Bargaining Power of Buyers/Consumers
4.7.3 Bargaining Power of Suppliers
4.7.4 Threat of Substitute Products
4.7.5 Intensity of Competitive Rivalry
4.8 Impact of COVID -19 on The Industry
5.1.1 Single Family Office
5.1.2 Multi Family Office
5.1.3 Virtual Family Office
5.2 By Asset Class Of Investment
5.2.3 Alternative Investments
5.2.5 Cash Or Cash Equivalents
5.3 By Geography
5.3.1 North America
5.3.4 Emerging Markets
6.2 Organisation Profiles
6.2.1 Cascade Investment LLC
6.2.2 Bezos Expeditions
6.2.3 Bessemer Trust
6.2.4 MSD Capital
6.2.5 Stonehage Fleming
6.2.7 Emerson Collective
6.2.8 Silvercrest Asset Management*