To begin, what exactly is a “family office”? Depending on who is questioned, a firm’s designation as a family office might be different. That being said, any business that invests money directly on behalf of the ultimate principle is what we all think of as a family office. Unlike hedge funds, pension funds, endowments, and other organizations, the family office services do not pool third-party cash before investing. They are working with the assets of single or many families.
The following are some of the characteristics of family offices:
Family offices can be organized around a single principle or numerous principles.
Size: Assets under management range from a few hundred million dollars to several billion.
Structure: There are various options available, from full-fledged financial advisers to single-mentioned individual advisors.
Strategy: While real-world wealth preservation is the primary aim, capital appreciation or growth might be as significant depending on the nature of the principles.
The Family Office Association Hong Kong (FOAHK) is booming worldwide, with Asia leading the charge. This surge is partially the result of increased wealth and global prosperity migrating eastward. It’s also a product of the industry’s evolving nature and the increasing complexity of wealth management.
Traditionally, the family office was primarily concerned with money and legacy preservation. While this is still a focus for the company, wealth expansion is becoming more important. This has accelerated a broadening of the family-office investment universe beyond traditional asset classes into areas such as private equity, venture capital, ESG investments, and even cryptocurrency in a low-interest, low-yield world. Expertise is in higher demand as investments become more complex and high-net-worth families become globalized.