How family offices are changing the financial landscape | Terry Paule posted on the topic | LinkedIn (2024)

Family offices have been around for decades, largely operating under the radar. In recent years, there has been a significant shift in the financial landscape, as family offices have gained increasing prominence and influence. Driven by a growing number of ultra-high-net-worth families who seek more authority over their wealth and investments, family offices continue to become more relevant in financial spaces. This has boosted a remarkable wave of innovation within family offices that are looking to offer more personalized services to their clients.By expanding their services beyond traditional wealth management services, and including services such as philanthropy and tax planning, family offices have expanded their impact within the financial landscape. #FamilyOffices #WealthManagement #HNWC #WealthPlanning

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“One phenomenon impacting both the creation of new family offices and their investment strategies is the great wealth transfer, which is expected to make Millennials the richest generation in American history,”Are you ready for the great wealth transfer?Wealth is a tool that must be sharpened to remain intact. That means family offices need strong operators that procure smart, lucrative investments that create a positive impact on the community. “An aging population means more family offices are transferred to the next generation – and this demographic shift is happening across the world. With this demographic change comes a shift in focus for family offices, from wealth creation to wealth retention,” We strive to be a resource to Family Offices and RIA's to help them preserve and build their wealth while creating a net positive impact on the country and possibly the world. Right now we have opportunities that do just that, targeting an IRR north of 22%, 80% equity recapture in year 1, capital gains free exit at year 10 and a positive impact on the community. Let's connect if you'd like to learn more. https://lnkd.in/eP464QTT

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Visit my group to get summary of articles like this one:Key bullet points from the article "The Rise and Rise of the Family Office: An Analysis" by Josipa Majic (Forbes, 2024):>> Family offices are experiencing a surge in popularity due to factors such as increased wealth, demand for customized services, and a need for better risk management.>> The growth of family offices is leading to a rise in direct investments, with a focus on private equity and venture capital.Family offices are adapting to the changing landscape by investing in technology, updating risk measures, and expanding their teams.>> The economic uncertainty caused by the pandemic has led family offices to prioritize balance and stability.>> As the number of wealthy families increases, the demand for reliable information on family offices and best practices continues to grow.URL: https://lnkd.in/eSxD4suAURL: https://lnkd.in/eSxD4suA

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🔎 Family Offices have approximately $10 trillion in assets. 🚀 Informative read by Ronald Diamond if you’ve ever wondered about private capital.Fio Capital Group -www.fio.group#PrivateEquity | #FamilyOffice | #Business | #Investing| #Entrepreneurship | #VentureCapital | #EconomicGrowth

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Excellent insights from Ronald Diamond and a great repost from Ronald Diamond and Antonios (Tony) Kypreos about Family Office trends. As our Managing Partner, Paul Anthony Claxton has said "for right now AI is the technology that is truly recession-resilient. Not recession-proof, recession-resilient. AI has been called 'the new electricity' and just like we need electricity during recessions and maybe even more than during up markets, we need AI during the the slower times. Valuations may be lower, but demand may remain high and push those valuations back up to bull market levels. "If you have not looked at AI as an investment strategy, perhaps now is the time.#strategy #technology #ai #investment #ai #markets #electricity #familyoffices https://lnkd.in/eJ6T_tqe

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New Post: Exploring Key Considerations of Single Family Offices for 2024 - Navigating investments in 2023 proved to be a formidable task, marked by persistent concerns about a looming recession, high inflation, global risksand a myriad of other challenges. Amid market volatility, family offices adopted a defensive stance. Single family offices, recognizing the need for agility, find themselves operating in an environment shaped by rapid economic and geopolitical shifts. In response, these entities are compelled to exhibit adaptability and strategic refinement, skillfully steering through intricate challenges to ensure effective wealth management on the global stage.Diving into 2024, let’s explore the considerations anticipated to shape the trajectory for single family offices this year.Strategic Succession: The Long-Term Vision of Single Family OfficesWhen contemplating the future, one should not overlook the enduring vision of single family offices, particularly the achievement of successful succession in transferring family businesses and assets. An estimated 18,500 individuals, each possessing a net worth of $100 million or more, are poised to transfer a significant portion of their assets to a new generation, marking the advent of what is now termed the ‘Great Generational Wealth Transfer.’ This movement indicates that individuals within single family offices are eager to involve younger members in investment decisions from the outset, and conversely, younger members are more than willing to take on this responsibility.Unlike the past, where younger and less experienced members might have had limited influence, there are now clear indications of their earlier engagement in family wealth affairs. This shift reflects a growing interest among the younger generation, particularly as their investment and philanthropic interests diverge from those of previous generations. Ethical investment portfolios, in particular, find greater resonance among the younger cohort, underscoring the evolving priorities within wealthy families.The role of technology in enabling real-time reporting When thinking of the next generation, digitization will play a big role in family offices. As digital natives, millennials and Gen Z insist on a higher level of technological sophistication, particularly in achieving 'real-time' capabilities across all business interactions. As such, technology may continue to play a big part in office structures. It is in the interest of single family offices to look into providing tools and technology that ensure all transactions and interactions are immediate, straightforward and seamless—all while maintaining an intuitive user experience. With the ascent of the new generation to positions of influence, the reliance on technology for reporting and obtaining real-time insights into the family's complex global connections, coupled with swift access to comprehensive auditab

The Rise of Family Offices: A New Gold Rush on Wall StreetIn the world of finance, trends come and go, but some shifts have a lasting impact. Over the past few years, one such phenomenon has been the exponential growth of family offices. Since 2019, the number of family offices has tripled, sparking a new gold rush on Wall Street.What are Family Offices?Family offices are private wealth management advisory firms that serve ultra-high-net-worth individuals and families. These entities provide a range of services, including investment management, financial planning, philanthropic activities, and estate planning. Traditionally, family offices were associated with the super-wealthy, but their prevalence has surged in recent years.The Gold Rush EffectThe proliferation of family offices has transformed the financial landscape in several ways:Increased Investment Activity: With more family offices entering the scene, there's been a surge in investment activity across various asset classes. From traditional stocks and bonds to alternative investments like private equity and venture capital, family offices are diversifying their portfolios to seek higher returns.Demand for Specialized Services: As family offices expand their investment horizons, there's a growing demand for specialized financial services. Firms offering bespoke investment strategies, tax optimization, and succession planning are witnessing heightened interest from family offices keen on maximizing their wealth.Competition for Talent: The rapid growth of family offices has led to fierce competition for top talent in the financial industry. Professionals with expertise in wealth management, asset allocation, and risk assessment are in high demand as family offices seek to bolster their teams to navigate complex investment landscapes.Impact on Markets: The substantial capital deployed by family offices has the potential to influence market dynamics. Their investment decisions can impact asset prices, market liquidity, and overall market sentiment, making them a significant player in the financial ecosystem.Navigating the New LandscapeFor investors, financial professionals, and entrepreneurs alike, understanding the rise of family offices is crucial for navigating the evolving financial landscape. Whether you're exploring investment opportunities, seeking strategic partnerships, or looking to provide specialized services, staying informed about the trends shaping the industry is paramount.As family offices continue to proliferate and exert their influence on Wall Street, adaptation and innovation will be key to thriving in this new era of wealth management.

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Family Offices have approximately $10 trillion in assets. And over the next two decades we are going to experience the largest transfer of wealth in history -- roughly $84 trillion. So it matters what Family Offices do and think. And below is a synopsis of what Family Offices are doing and thinking.The Family Office trends for the rest of 2023 will be dominated in large part by inflation and its effects on the global economy.All these things influence how Family Offices think, invest, and operate.According to a report fromCampden Wealth, more than 3/4 of North American Family Offices grew their wealth in 2022, and more than half of Family Offices grew their assets under management.Additionally, North American Family Office investments outperformed global peers with 15% average portfolio returns, compared to 10% in Asia-Pacific, and 13% in Europe.Despite doing relatively well, the report found Family Offices have an increasingly bearish outlook on the economy for 2023, as high inflation persists.3 out of 4 Family Offices surveyed by Campden Wealth invested in healthcare in 2022, and 39% plan on increasing their investment in 2023.Other areas most likely to see a rise in allocations are artificial intelligence, with 40% of those invested there planning to increase their allocations, green tech (35%) and biotech (34%).Family Offices have found theprivate marketsto be a good hedge against inflation, as they have increased their exposure to private debt, private equity, and real estate. A report by UBS and Campden Wealth Research revealed that62% of Family Officesare currently using AI or are planning to do so in the near future.According to aMorgan Stanley analysis, private equity, venture capital, private credit, private real estate and infrastructure investments have historically overperformed public markets.Family Offices on average allocateapproximately 45% of their portfoliosto alternative asset classes.And according to aUBSreport, over 80% of Family Offices invest in private equity.Of those Family Offices, every year an increasing number of them are making direct investments. Average allocations in private equity continued to rise, from 16% average allocation in 2019 to 21% in 2021.The reason for the increase in private investing is simple. According to anotherUBS survey, 74% of families likely to increase their private equity allocations believe these investments will continue to outperform public equities.The Campden Wealth report found that in North American Family Offices, 30% of Next Gens have already assumed control of their families’ operations, and another 27% are expected to do so within the next decade.According to Research firm Cerulli Associates, they predict that overall wealth transferred between 2021 and 2045 will total $84.4 trillion.We are only in the third inning in the evolution of Family Offices. Stay tuned. #familyoffice #tiger21 #privateequity #realestate #venturecapital

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Great overview on the current thinking by family offices globally by Goldman SachsFamily offices continue to hold outsized allocations to alternatives. Collectively, private equity, privatereal estate and infrastructure, hedge funds, and private credit account for 44% of holdings. While many expect to maintain their current allocations over the next 12 months, there will be movement, with a considerable number of family offices expecting to increase their holdings in private equity, private credit, and private real estate and infrastructure. A substantial proportion (39%) of family offices plan to increase their holdings in fixed income over the next 12 months, possibly in response to the prospect of higher yields in lower-risk instruments. Cash and cash-equivalent holdings — currently 12% of family office portfolios, which is high comparedto that of other investors — are expected to fall, with 35% of respondents expecting to deploy this capital in the coming year as opportunities arise. Family offices are taking a similarly steady approach to their geographic allocations, with a strong focus on U.S. and other developed markets, which represent 63% and 21% of holdings respectively. Perhaps reflecting their greater concerns about geopolitical developments, 41% of APAC family offices expect to increase their allocation to U.S. holdings in the coming year. Family offices remain focused on secular growth themes that have the potential to endure business cycles and drive value over the long term: 43% of family offices globally consider their portfolios to be overweight information technology; 34% of family offices are currently overweight healthcare. Across products, 32% of family offices currently invest in digital assets. Within the digital-asset ecosystem, family offices have become more decisive about cryptocurrencies: the proportion that are invested has risen from 16% in 2021 to 26%. However, the proportion that are not invested and not interested for the future has risen from 39% to 62% and those that are potentially interested for the future has fallen from 45% to 12%. Most (76%) family offices support families with operating businesses and, of that cohort, 44% have a role in running their operating businesses. Among the latter, the most-cited potential catalyst for a sale is a favorable valuation (56%), though many (35%) plan to hold these assets in perpetuity.

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