Family Office

MFO Industry Bolstered By New Assets But Battling Constraints - Family Wealth Alliance

Harriet Davies, Editor - Family Weatlh Report, 14 May 2013

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Net new assets are flowing into the multi-family office industry, fueling a confident environment that many are working hard to capitalize on, according to the Family Wealth Alliance’s latest annual study of the sector.

Net new assets are flowing into the multi-family office industry, fueling a confident environment, but firms are having to overcome challenges to grow, according to the Family Wealth Alliance’s latest annual study of the sector. 

Despite a lackluster market environment in 2011, the 51 participating firms achieved asset growth of 9.6 per cent and revenue gains of 11.3 per cent that year (the study was conducted in 2012).

“Growth has emerged once again as the watchword after several very tough years,” said the organization’s chief executive, Thomas Livergood.

Total assets under advisement for all the firms stood at $367.7 billion at end-2011, while the average relationship size with a client family was $40.9 million.

Mean client asset size at the group of firms was $7.4 billion, while the median figure was $2.5 billion, which is perhaps more representative of the “average firm” given the influence a handful of large firms exert on the mean.

These figures imply net new money flowed into the MFO industry in 2011, which is reflected in rising confidence among the players, with a vast majority of these businesses (nearly 90 per cent) saying they felt in a stronger competitive position in 2012 than three years earlier.

The tables produced by the Family Wealth Alliance, detailing the relationships of some of the leading family offices, demonstrate just what a varied group of businesses this is. For instance, only one family office (Rockefeller & Co) features on both the top ten by number of client relationships and the top ten by size of client relationships.   

The largest firm in terms of the size of its average relationship is Lowenhaupt Global Advisors, which has an average relationship size of $224.7 million, followed by US Trust Family Office, with $181.3 million. Meanwhile, Atlantic Trust and Bessemer Trust top the list in terms of number of relationships, with 2,281 and 2,162 client families respectively.

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