NEWS AND INSIGHTS FROM FINTRX
Single-family offices have rapidly advanced over the past several years, essentially reforming the way in which the ultra-wealthy manage and allocate their capital. Although this transformation continues to add value for high-net-worth families and individuals around the world, this evolution has also added a new level of complexity to an already murky landscape. In an effort to provide further color into the private capital markets, we have summarized a number of common questions regarding single-family offices.
Single-family offices (SFOs) are private groups that manage the financial and personal affairs of one high-net-worth family or individual, as opposed to multiple families and individuals. Single-family offices come in all sizes and forms depending on the wealth and overall dynamics of the family itself.
As mentioned above, single-family offices and multi-family offices mainly differ in the number of clients they offer services to at one time. Single-family offices support and manage one family or individual whereas multi-family offices provide a broader range of services to a number of families and individuals. This can range from just a couple of families to north of 50+. In addition, you will often see multi-family offices that began as single-family offices and later expanded into multiple-family offices as they slowly took in others to form increased infrastructure and expertise.
From a fund-raising perspective, family offices are increasingly being seen as ideal investors, as they offer efficiency, streamlined decision-making, larger checks and oftentimes a higher level of flexibility and sophistication as compared to other types of investors. To successfully raise capital from a family office, you must first understand the fundamentals of each and what sets them apart from one another.
Like any vertical dealing with the ultra-wealthy, single-family offices are unique in their setup and structure, as they are entirely driven by the needs of the family. When it comes to the staffing procedures for a single-family office, keep in mind this number differs greatly among all entities. Some start with one or two employees managing the family's affairs, and over time may grow to have more than 50 employees. Again, there is no set number, as it depends entirely on the specific desires of the family or individual.
- Private Lawyers
- Fund Managers
- Tax & Trust Specialists
- Accounting & Financial experts
- Real Estate Professionals
- Investment Due Diligence & Research Professionals
- Luxury Goods Oversight
- Senior Bankers
- Executive Assistants
With greater wealth comes greater financial complexity - especially in regard to one wealthy family or individual. That being said, one would create a single-family office to preserve and manage a large fortune for the coming generations. Free from institutional mandates, intermediaries, and other standard due diligence procedures, single-family offices provide greater freedom and flexibility to allocate capital in a way that aligns with the values and desires of the family.
Single family offices offer a multitude of personal and wealth management solutions that differ considerably depending on the requirements and fortune of the family. Those who do employ single-family offices [normally] control the applicable services as well as how those services are delivered to the family. Traditional single-family offices generally provide a wide array of specialized solutions listed below.
- Lifestyle/wealth management
- Investment implementation
- Asset allocation
- Legacy planning
- Legal advice
- Tax preparation
- Insurance planning
- Charitable assistance
- Banking/accounting operations
- Estate planning
- Risk management
- Bill paying/record keeping
- Family governance
Assets under management (AUM) is the total value of all the assets managed by a family office. The true minimum AUM threshold to be considered a single-family office is cloudy, and depends entirely on the services that the family requires. Some say $10 million, others prefer $20 million and the list goes on.
At FINTRX, we use a minimum asset threshold of $50 million to qualify a family office for inclusion in our data platform. This means that we only include family offices that have a minimum of $50 million in assets under management (AUM) in our database. By doing so, we ensure that our users have access to a high-quality and exclusive set of family office data, which is highly relevant to their investment needs. This threshold is based on our analysis of the private wealth market and is subject to change as we continue to refine and improve our data platform.
Single-family offices are an attractive pool of capital for a number of reasons. Despite the obvious structural advantages (their distinct flexibility, straightforwardness, perfectly tailored services, etc.), high net-worth individuals and families are also drawn to their privacy and confidentiality. Single-family offices represent attractive pools of capital for investment firms from hedge funds, private equity funds, real estate funds, and long-only money managers - to name a few.
Utilizing Google searches and internet exploration may have certain benefits, but such techniques tend to be time-consuming, less effective and commonly result in unreliable or sparse data. Further complicating matters, the static family office Excel lists available for purchase often suffer from incomplete or out-of-date information. Fortunately, the FINTRX family office data and research platform steps in to offer much-needed clarity within this often-opaque family office landscape.
FINTRX is a reliable source for finding comprehensive single-family office data intelligence. Using a rigorous data collection and verification process to ensure the accuracy and relevance of our data, our platform offers a range of powerful search and analysis tools that enable our users to easily identify and engage with potential family office investors worldwide. FINTRX has a team of experienced and dedicated researchers who use a variety of trusted sources to collect family office data, which is then verified through multiple channels to ensure its accuracy.
The number of single-family offices around the world is on the rise - and this trend shows no signs of slowing down any time soon. As more capital raisers turn to the space for funding, family offices are finding it more beneficial to become forward-facing, allowing for higher-quality deal flow. Although the modern family office may be somewhat more transparent than those that came before it, finding the second layer of insight such as their investment criteria, portfolio, and contact information remains trying.
Leveraging a powerful family office research solution like FINTRX offers an opportunity to gain new partnerships and gives capital raisers access to a niche, unique untapped pool of capital. As wealth continues to grow, there is no doubt that single-family offices will play an even larger role in the management of substantial wealth in the years ahead.
FINTRX is a unified family office and registered investment advisor (RIA) database that provides comprehensive data intelligence on 850,000+ family office & investment advisor records, each designed to help asset-raising professionals identify, access and map the global private wealth ecosystem. Find relevant decision-makers in a snap with powerful search filters and queries. Uncover the data you need, when you need it and filter through areas of investment interest, AUM, asset flows, intent signals, potential associates and much more. FINTRX sources data from both public and private sources and has a team of 70+ researchers who map, validate and compile data daily to ensure its accuracy.
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September 18, 2019
Renae Hatcher is a member of the marketing team at FINTRX - focused on delivering targeted & relevant family office and registered investment advisor content to our subscribers.