Family offices seek to band together, form international body as global wealth swells

THE ultra-wealthy are getting organised. A Paris-based group bringing together family offices from a handful of countries is trying to drum up support for uniting the growing industry. 

The nascent International Federation of Family Office, or IFFO, says it has so far pulled in national associations from Belgium, France, Lithuania and most recently Canada.

Meanwhile, “contacts have been established” in Germany, Italy, Switzerland and Singapore as part of its effort to build a cross-border network, the IFFO says.

The move comes amid rapid growth in the ranks of the ultra-wealthy around the world and a parallel expansion of professionals working through family offices dedicated to their investment, banking, governance, legal and other needs.

The number of single family offices – which are generally loosely regulated private entities – is expected to increase to about 10,700 globally by the end of the decade from just over 8,000 in 2024, according to a study by Deloitte, which called them an emerging “economic powerhouse”.

Other estimates have put the existing number much higher.

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“Wealthy families the world over are facing some of the same sorts of issues,” said Frederick Crot, president of IFFO, citing examples like succession within closely held enterprises, intergenerational wealth transfer and philanthropy.

“Discussions about deals, head hunters and family office remuneration can also be helpful.”

Potential opening up of secretive sector

The bid to create an international body representing the profession is also a sign the traditionally secretive sector may be opening up, albeit just a little bit, Crot said. 

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He previously headed the Association Francaise du Family Office, or AFFO, which groups together the sector in France.

The idea for creating an international organisation came during a visit by AFFO to Milan in 2020 and he and his predecessor have been trying to recruit suitable national organisations ever since.

But Crot acknowledges that while the profession is warming to the idea, it is going to take time. In his native Switzerland, the Swiss Single Family Office Association has yet to sign on to IFFO, which also includes organisations representing so-called multi-family offices.  

Family offices can vary drastically from firm to firm in terms of age, assets, sophistication and investment approach.

More and more networks and organised communities have emerged in recent years as the typically low-profile structures have sought ways to connect discreetly with other families to share knowledge and leads on deals.

At least a fifth of the world’s 500 richest people now have an investment firm overseeing their wealth, helping manage fortunes totalling more than US$5 trillion, according to the Bloomberg Billionaires Index. 

John D Rockefeller formed what is considered the first family office in the early 1880s to consolidate and manage his investments. Among the biggest family offices are Bill Gates’ Cascade Investment and Zara founder Amancio Ortega’s Pontegadea Inversiones. BLOOMBERG