A multi-family office is a type of family office that manages the wealth of several families. A family office refers to the management of the assets of one or more families. There is a basic distinction between a single-family office and a multi-family office. The differentiation is based on the number of families whose assets are managed by the family office. The goal of such an entity is to manage, organize and preserve or increase the families’ assets.
What is a multi-family office?
Family offices are aimed at wealthy individuals or, more usually, wealthy families who want their assets professionally managed. Family offices offer a range of services, which mainly focuses on asset management.
They usually make use of a large network of experts and act strategically. Family offices, therefore, have more opportunities to carry out asset management successfully and effectively. They also have dedicated staff for different types of investments.
Single-family offices are established by the respective family or wealth owner. Conversely, multi-family offices cater to several families. Accordingly, single-family offices are generally privately owned. Multi-family offices, on the other hand, offer their services to several clients.
How do multi-family offices work?
The owners of multi-family offices are usually the families, whose assets are managed. The reason is to avoid any conflict of interest. It is solely committed to the interests of the families it manages wealth for.
Therefore it is independent of the economic interests of third parties. In order to avoid conflicts of interest, the multi-family office is not operationally active in the fields in which it supervises. It finances its operations exclusively on a fee basis.
In addition to asset and wealth management, a multi-family office offers other services. Due to the fact that multi-family offices cater to more families, they often have a wider range of services to offer, when compared with single-family offices.
Image source: Sum
Leave a Reply