Single-family offices (SFOs) manage vast swathes of assets, worth over $4.6 trillion globally, a With Intelligence report has revealed.
Many HNW and UHNW families utilise SFOs to manage, and most importantly grow, their wealth. Ever private, these investors have often taken measures to ensure there are the highest levels of discretion surrounding their assets.
The report analysed the data and information from over 3,400 SFOs and 1,500 multi-family offices (MFOs) to understand their distribution, in both financial and numerical terms, across the globe.
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North America has continued to be a dominant force in the world of SFOs, having been home to 42 per cent of them globally. The UK, Channel Islands, Ireland and Isle of Man have made up nine per cent in comparison, which is unassumingly impressive given that the US economy dwarfs that of Britain’s in many respects.
Asia Pacific has come in at second on the list, playing host to 10 per cent of the world’s SFOs and nine per cent of the assets held by these offices globally. Vast areas of the world are covered by this region, which includes China, Hong Kong, Japan, Australia and Singapore, among others – all of which are home to countless HNWs and UHNWs in their own right.
At a time when pension funds manage assets worth over $55 trillion, the amount held by SFOs is impressive considering the much smaller number of people’s wealth they represent, owning over eight per cent of this value. This percentage could easily be higher, as new SFOs are discovered by groups like With Intelligence each year.
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Investing with long-term goals is the name of the game for SFOs and MFOs, with the longevity of their assets needing to last over generations. With this in mind, their investing habits have often differed from banks and other organisations which have been able to gamble more with short term expenditure.
One family’s fortune might be built up by property investments, like the Grosvenor family‘s sweeping London estates, and another may have pooled their money into art and antiques, such as the Niarchos family’s vast collection of objects. Although different SFOs have focused on different sectors, there have been trends in which asset classes they have chosen to invest in.
Private equity is the common dominator among the vast majority of SFOs, with 92 per cent of them having invested in this asset class, amounting to $530 billion in value. By comparison, 70 per cent of them have invested in public equity, 68 per cent in real estate and almost exactly half of them have holdings in cash.
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‘Real assets’, which includes infrastructure, commodities, gold and natural resources make up 32 per cent of SFOs’ investments. Each of these have been known to make good long-term investments, especially during times of conflict and political uncertainty.
While the fortune of an UHNW individual can be associated with one business in particular, it is often the case that they have diversified their assets. Bernard Arnault, head of French luxury conglomerate LVMH, has invested in Netflix and ByteDance, the parent company of TikTok, alongside his notoriously fashionable assets, reported Forbes. Similarly, US President Donald Trump, whose investments have distinctly political affiliations, has bought into NFTs to accompany his real estate fortune.
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