Explosive Growth of Family Offices

Family offices, the in-house investment and service firms of families with a net worth typically over $100 million, are experiencing rapid growth. The number of single-family offices is expected to rise from 8,000 to 10,720 by 2030, according to a report by Deloitte Private.

• Their assets are projected to more than double, reaching $5.4 trillion by 2030, up from $3.1 trillion today.
• The total wealth of families with family offices is expected to top $9.5 trillion in 2030, more than doubling over the decade.
• The growth has been driven by increasing wealth concentration at the top and a revolution in wealth management.

Wealth Concentration and Rise of Ultra-High-Net-Worth Individuals

The growth of family offices is fueled by the increasing concentration of wealth among the ultra-rich, driven by technology and globalization.

• The number of Americans worth $30 million or more grew 7.5% in 2023, while their fortunes surged to $7.4 trillion.
• The population of centimillionaires (those worth $100 million or more) has more than doubled over the past 20 years to over 28,000.
• There are now an estimated 2,700 billionaires in the world, more than 2.5 times the number in 2010.

Shift to Customized Wealth Management

The ultra-wealthy are changing how they manage their investments and financial lives, opting for more customized and dedicated solutions through family offices.

• Family offices offer more privacy, customization, and tailored programs for the next generation of the family.
• They provide a dedicated team to handle all aspects of the family's financial life, 24/7.
• After the financial crisis, wealthy families sought advisors that represent their best interests, rather than those incentivized to sell products.

Rise of Venture Capital and Private Equity Investments

Family offices are shifting their investments towards alternative assets, including venture capital, private equity, real estate, and private credit.

• Family offices now have 46% of their total portfolio in alternative investments, with the largest amount (19%) in private equity.
• More family offices are making direct investments in private companies, with 62% making at least six direct deals last year.
• Private equity giants like Blackstone, KKR, and Carlyle are building out their private wealth teams to target family offices.

Institutionalization and Professionalization of Family Offices

As family offices expand in size and number, they are becoming more institutionalized and professionalized.

• The average family office has a staff of 15 people managing $2 billion.
• Family offices are on a hiring spree, with 40% planning to hire more staff this year.
• There is a trend towards increased governance, technology adoption, and outsourcing of services.

Generational Wealth Transfer and Increasing Role of Women

With the great wealth transfer expected to shift trillions of dollars to spouses and the next generation, more women and inheritors will start running family offices in the coming years.

• The average age of family office principals is 68 years old, and 4 in 10 family offices will go through a succession process in the next decade.
• While women represent 10% of the wealth holders for those with $100 million or more, they control 15% of the world's family offices.
• Family offices can focus on key stages of life, retirement, legacy planning, and preparing the next generation.

The North American Family Office Landscape

North America is leading the family office revolution, with the region's family office wealth expected to grow by 258% between 2019 and 2030.

• North America's 3,180 single-family offices are expected to balloon to 4,190 by 2030, accounting for about 40% of the world's total.
• The total wealth held by families with family offices in North America has more than doubled since 2019, to $2.4 trillion, and is expected to reach $4 trillion by 2030.
• This $5 trillion pool of capital has sparked a feeding frenzy on Wall Street, with traditional wealth management firms launching new family office teams.

The Ecosystem of Family Office Services

A new ecosystem of companies is benefiting from the rise of family offices, providing various services and support.

• Accounting firms, tax attorneys, consulting firms, and tech companies are catering to the needs of family offices.
• Family offices can now more easily outsource parts of their business to keep costs lower.
• This ecosystem includes companies offering services ranging from investment management to lifestyle management and concierge services.