Key Takeaways
- • Family offices now number over 8,000 single-family offices worldwide, 68% established this millennium, managing more than $3 trillion in assets, according to Fortune's reporting.
- • The number of family offices is expected to rise 75% by 2030, with the wealth of associated families projected to reach $9.5 trillion in the same period.
- • A 2024 J.P. Morgan Private Bank report puts private investments and alternatives at 45% of client portfolios, with an average target return of around 11%.
- • Nearly a third of global startup capital in 2022 came from family offices, per a 2023 PwC report.
- • The average established family office costs more than $6 million a year to operate, with nearly 25% costing over $10 million, according to J.P. Morgan.
Summary
Family offices, the firms that manage wealth for the world's richest households, have grown substantially as the number of ultrawealthy families and the wealth they hold have expanded. According to Fortune, there are now over 8,000 single-family offices worldwide, 68% of which were established this millennium, managing more than $3 trillion in assets. The total number is expected to increase 75% by 2030, and the wealth of the families behind these offices is projected to reach $9.5 trillion over the same period. While one of the earliest was set up by the J.P. Morgan family in 1838, the sector's growth has accelerated in recent years.
Services typically extend well beyond investment advice to include tax planning, charitable giving, succession planning, and intra-family dispute resolution. Many high-net-worth households instead use multifamily offices such as Matter Family Office and Iconiq Capital to keep fees low and access better investments. Bruce K. Lee of Keebeck Wealth Management attributes much of the growth to changes following the 2009 financial crisis, when the collapse of Lehman Brothers prompted wealthy families to seek advisers focused solely on their interests. Daniel Gourvitch of Mercer Advisors, which serves more than 30,000 families, said his firm operates entirely in clients' best interests.
Family offices are increasingly significant capital providers. A 2024 J.P. Morgan Private Bank report puts alternatives at 45% of client assets, spanning hedge funds, private credit, private equity, real estate, and venture capital. Nearly a third of startup capital worldwide in 2022 came from family offices, per a 2023 PwC report. Private equity firms are building wealth teams to access this capital, and banks including Citi Private Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, and UBS are launching family office teams. Myles Milston of Globacap noted that large private equity firms can raise $1 to $2 billion from family offices beyond traditional pension commitments.
The average established office costs more than $6 million annually and employs 11 people, though half report five or fewer, according to J.P. Morgan. Lee estimates a single-family office requires at least $500 million in assets to be viable, while many experts cite around $100 million. The Great Wealth Transfer, which Cerulli Associates projects could move $124 trillion by 2048, is expected to reshape offices as younger heirs pursue different investments and philanthropy, according to Morgan Stanley Wealth Management.
Services typically extend well beyond investment advice to include tax planning, charitable giving, succession planning, and intra-family dispute resolution. Many high-net-worth households instead use multifamily offices such as Matter Family Office and Iconiq Capital to keep fees low and access better investments. Bruce K. Lee of Keebeck Wealth Management attributes much of the growth to changes following the 2009 financial crisis, when the collapse of Lehman Brothers prompted wealthy families to seek advisers focused solely on their interests. Daniel Gourvitch of Mercer Advisors, which serves more than 30,000 families, said his firm operates entirely in clients' best interests.
Family offices are increasingly significant capital providers. A 2024 J.P. Morgan Private Bank report puts alternatives at 45% of client assets, spanning hedge funds, private credit, private equity, real estate, and venture capital. Nearly a third of startup capital worldwide in 2022 came from family offices, per a 2023 PwC report. Private equity firms are building wealth teams to access this capital, and banks including Citi Private Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, and UBS are launching family office teams. Myles Milston of Globacap noted that large private equity firms can raise $1 to $2 billion from family offices beyond traditional pension commitments.
The average established office costs more than $6 million annually and employs 11 people, though half report five or fewer, according to J.P. Morgan. Lee estimates a single-family office requires at least $500 million in assets to be viable, while many experts cite around $100 million. The Great Wealth Transfer, which Cerulli Associates projects could move $124 trillion by 2048, is expected to reshape offices as younger heirs pursue different investments and philanthropy, according to Morgan Stanley Wealth Management.
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