Family Offices Wield Growing Power

Family offices are the new power players on Wall Street.A growing number of wealthy Americans are launching family offices, firms that do everything from investing money for the super-rich to managing their personal affairs. They are huge, secretive and their influence on Wall Street and Main Street is only growing.Families with these offices recently oversaw around $5.5 trillion in wealth, a 67% jump from five years ago, according to Deloitte. The firm expects that figure to rise to $6.9 trillion this year and top $9 trillion by 2030. It estimated that in the coming years, these offices will manage more money than hedge-fund firms.Banks and other firms are hungry to cater to family offices’ every need, while entrepreneurs and investment managers are clamoring to land a slice of these families’ immense wealth.“It’s not just growing, it’s exploding,” said Hendrik Jordaan, a partner at Nelson Mullins who works exclusively with family offices. “I really think about the family office world being the next private equity.”Launching a family office is in vogue. While the biggest ones have long managed billions of dollars on behalf of titans such as Jeff Bezos, Michael Dell and Bill Gates, many families with hundreds or tens of millions of dollars in wealth are launching them, too, or turning to so-called multifamily offices to manage their fortunes.There are more than 8,000 single-family offices globally today, up around a third from 6,130 in 2019, according to Deloitte. The firm expects that figure to top 10,000 by 2030.“It’s kind of become the word for ultrahigh net worth families. Do you or don’t you have a family office?” said Justin Flach, managing director of wealth strategy for Ascent Private Capital Management at U.S. Bank, who typically works with families with net worths topping $75 million.“There’s some status assigned to that. You're at a cocktail party talking about it,” Flach said.

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Family Offices Wield Growing Power