If you don't know where you are going , any road will take you there. Is a family office a vehicle for more efficient and/or broader passive investment? Will it be entrepreneurial? Is it based around a central business to which a majority of the family is committed or is it an investment channel for a group of linked by familial bonds and/or shared values ? Is it big enough and does it have a diversified client base and professional management that it ultimately transcends its founding family?
This isn't just an investment issue . It is a question of the continuing appropriateness of a consolidated vehicle.
Enjoyed this so much. Reminded me of The Battle for WSJ and how the Bancroft family couldn’t unite on any front and give away the media empire to Murdoch.
I have seen single FOs first hand and am currently working in a MFO. Most people tend to think that families with big portfolios (>$150mln) tend to be more rational, more sophisticated and better investors but I assure you that is a far-cry from where things stand. Also keep in mind that many families set-up single FO without really investing in the structure and that turns out to be a worse choice than working directly with one or two private banks. Finally I would suggest that, unless you are speaking of a very large single FO (above $1bn), it is very very hard to attract talent as these structures are simply not competitive in terms of compensation.
Great article Frederick. Working for a family business business is like trying to carry a cat by the tail.... it is a unique experience. 😑
If you don't know where you are going , any road will take you there. Is a family office a vehicle for more efficient and/or broader passive investment? Will it be entrepreneurial? Is it based around a central business to which a majority of the family is committed or is it an investment channel for a group of linked by familial bonds and/or shared values ? Is it big enough and does it have a diversified client base and professional management that it ultimately transcends its founding family?
This isn't just an investment issue . It is a question of the continuing appropriateness of a consolidated vehicle.
Great article
Excellent article. You are a very good writer. And English is your second language!
Enjoyed this so much. Reminded me of The Battle for WSJ and how the Bancroft family couldn’t unite on any front and give away the media empire to Murdoch.
I have seen single FOs first hand and am currently working in a MFO. Most people tend to think that families with big portfolios (>$150mln) tend to be more rational, more sophisticated and better investors but I assure you that is a far-cry from where things stand. Also keep in mind that many families set-up single FO without really investing in the structure and that turns out to be a worse choice than working directly with one or two private banks. Finally I would suggest that, unless you are speaking of a very large single FO (above $1bn), it is very very hard to attract talent as these structures are simply not competitive in terms of compensation.