US-based multi-family offices saw assets under management rise by an average of 26,6 per cent in 2004, with the median amount under manageme...

US-based multi-family offices saw assets under management rise by an average of 26,6 per cent in 2004, with the median amount under management at each firm totalling $1 billion, according to new research. The research, conducted by Bloomberg Wealth Manager and Family Office Management, a consulting firm based in Illinois, also found that most of the 69 firms reviewed in the research said clients were more demanding than ever, with clients “bargaining hard on fees and demanding a lot of services”. But recruitment, retaining and training of staff were viewed as the biggest challenges for multi-family offices. The Bloomberg research found 2004 was a good year for US multi-family offices, with the median number of multi-generational family client relationships growing by 8 per cent to 27. Median assets attributable to these families rose by 26.7 per cent, to total $650 million, which made the median multi-generational family client relationship worth $23.2 million. The research found that some firms saw growth in assets in triple digits. At TBK Investments in Miami assets grew 188.4 per cent year-on-year to more than $351 million and at the Sage Partnership in Minnesota, assets increased almost 110 per cent to $1.2 billion. New York had the highest number of multi-family offices with a total of nine, followed by California and Pennsylvania, each with seven, and Florida, Ohio, Washington, and Wisconsin, each with four. Despite the existence of many oil-rich multi-millionaires in Texas, the state had only three multi-family offices. By the far the most frequently mentioned challenge multi-family offices face involves recruiting, developing, and retaining professionals, according to the research. The study also found that several multi-family offices have gained clients from single-family offices, such as RINET in Boston, which added two new single-family offices as clients last year. Technology, and how much multi-family offices should spend on it, was cited by more than a third of the firms as an issue. Specifically, how to integrate and/or consolidate technology was viewed as the toughest problems they face. Nine of the multi-family offices in the survey were involved in a merger or acquisition in 2004. And further consolidation is expected. According to the research, twenty firms report that they are likely or somewhat likely to acquire a smaller firm within the coming 12 months, three firms say it is somewhat likely that they will be acquired by a larger firm, and three others report it is likely or somewhat likely they will merge with a firm of equal size. Bloomberg and Family Office Management sent out questionnaires to firms deemed likely to be multi-family offices. To be included in the accompanying listing, it was required that firms offer an extensive menu of family office services. Further, the researchers set a minimum average size of $4 million for multi-generational client relationships, and a minimum of 25 per cent of firm revenue coming from multigenerational client relationships. A full copy of the report with the listing of all the 69 firms is available at: http://wealth.bloomberg.com/wealth/0905/sep_ft_mfo.pdf