A family office is a private company created with the intention of managing a family's assets and ensuring its continuity over time.
Let's imagine a family that has investments in stocks, bonds, private equity, venture capital, real estate investments, different business structures, investments in art and collectibles, among other investments. As the wealth of a family or family group grows and becomes more heterogeneous, the task of managing it in its entirety can become complicated and consume a lot of time and dedication, in addition to requiring specialized knowledge. At such a point, it is necessary to be able to channel all management through a company. And from there, the family office was born, which basically as its translation tells us, is the office of a family. The office through which all asset management is centralized.
Family office services
Family Offices can provide different types of services since it is sometimes difficult for everything to be channeled under the same company. That is why sometimes part of the management services are managed through other collaborating companies. The main services provided by a family office are the following:
- Management and advice on investments of a movable nature. That is, investment in stocks, bonds, investment funds and ETFs among others.
- Alternative investment management and advice. Within this group we can find investment in hedge funds, raw materials, private equity, venture capital, investment in farms and forest resources, among others.
- Management and advice on real estate investments.
- Advice on corporate operations such as mergers and acquisitions, capital increases, access to capital markets, etc.
- Management and advice on investments related to art and collecting.
- Advice on succession planning and generational change between the family and its heirs.
- Fiscal advice.
Types of Family Office
We mainly find 2 types:
- Single Family Office: These are created by a single family and are dedicated solely and exclusively to the heritage of this
- Multi Family Office: These are dedicated to managing the assets of various families. Sometimes these Multi Family Office emerge as Single Family Office and over time to take on more volume of assets and have economies of scale they become Multi Family Office including the management of the wealth of more families.
Why create or go to a Family Office?
Let's imagine that we are a family, we have a high net worth of different types and we need specialized management. Why create or go to a Family Office? The main reasons are linked to the intention of making the heritage grow, being able to protect it and bequeath it to the following generations. In addition, transmitting that heritage can be very costly at the fiscal level and the following generations could destroy it little by little if they do not know how to manage it. Hence, when these circumstances occur, the figure and services of a Family Office begin to make sense.