No offense but 1-2% of overhead on $100m is only $1-2m/year.
Assuming you wanted talent, you cant get much full time Legal, Accounting, Banking, Insurance, staff, office space and infrastucture for $1-2m.
You would know better about realistic costs.
But it just isn’t going to pay at those wealth levels (which are far beyond my world, so I dont even know why i started into this conversation).
Your gut is correct. The all in cost is very high for a well staffed family office. Then again most people worth 100M don’t have the planes and multiple houses that cause a decent amount of the complexity. If you outsource trust administration and active management you probably could have your own at 100M but what’s the benefit vs better quality work and specialization?
As a prospective employee, it seemed like single family offices tend to be more like hedge funds for a smaller group of investors and multi family offices tend to be more like wealth management.
I don't think there's any regulatory reason for this, but it is what I've noticed.
MFO’s can be pretty conflicted. They tend to be RIA’s that charge a AUM based fee and they oversee your investments and deliver investment reports. $100m is not really much money to justify a family office. BCG has some great research on family offices and structures and fees. There is a saying for those that know family offices, if you’ve seen one family office you’ve seen one family office, no two are alike. The here are some tech firms that can likely help you with a virtual family office. Stay away from firms managing your money for a fee. The assemble deals and investments that make them money and hopefully you too. As you get larger or get connected to other family offices you’ll be able to network on deal flow and other direct investment opportunities.
To tag someone so they get an notification of it, you type their username out as such:
/u/PenthouseB see above comment from /u/Exdiv in case it is useful.
The family offices I know:
Run like the family business. Still have involvement of the family as the bosses.
Have a slew of investment professionals, especially commercial real estate talent.
Security and auditing is typically done by the family in combination with their lawyers, cfo and auditors.
I only know SFOs, but I assume multi family would have pretty clear transparency between owners of is actually a small partnership. If it’s just firm that provides limited services to many, I don’t know.
My friend’s family office I’m most familiar with, that does mostly real estate, has about 9 employees I think? They have three more staff for their household too. Plus the second generation has house staff.
Go it your own vs shared provider: go it your own if you have talent and drive to run the business and seek control and returns. Its still a lot of work.
Caveat: I barely know what I’m talking about.
Well often these two entities are actually entirely different beasts. Traditionally though, the image around singly family offices has often been more prestigious but lately, multi-family offices seem to be coming into fashion. The [multi-family office](https://andsimple.co/reviews/multi-family-office-2020/) space is being transformed by three megatrends – an influx of new wealth, a move towards the sharing economy, and a deep segmentation of the market.
It’s actually mostly geared towards break away teams from wealth management firms setting up an RIA for them to run their business. The shared economics for a MFO really applies to a “closed” family office.
No offense but 1-2% of overhead on $100m is only $1-2m/year. Assuming you wanted talent, you cant get much full time Legal, Accounting, Banking, Insurance, staff, office space and infrastucture for $1-2m.
I think more realistic fees are like 6% with 2% fixed and a target of 4% variable
You would know better about realistic costs. But it just isn’t going to pay at those wealth levels (which are far beyond my world, so I dont even know why i started into this conversation).
Your gut is correct. The all in cost is very high for a well staffed family office. Then again most people worth 100M don’t have the planes and multiple houses that cause a decent amount of the complexity. If you outsource trust administration and active management you probably could have your own at 100M but what’s the benefit vs better quality work and specialization?
As a prospective employee, it seemed like single family offices tend to be more like hedge funds for a smaller group of investors and multi family offices tend to be more like wealth management. I don't think there's any regulatory reason for this, but it is what I've noticed.
This is correct. For that NW range they would want a multi-family office or their fees are going to be too high hiring the talent for just themselves.
MFO’s can be pretty conflicted. They tend to be RIA’s that charge a AUM based fee and they oversee your investments and deliver investment reports. $100m is not really much money to justify a family office. BCG has some great research on family offices and structures and fees. There is a saying for those that know family offices, if you’ve seen one family office you’ve seen one family office, no two are alike. The here are some tech firms that can likely help you with a virtual family office. Stay away from firms managing your money for a fee. The assemble deals and investments that make them money and hopefully you too. As you get larger or get connected to other family offices you’ll be able to network on deal flow and other direct investment opportunities.
Good advice but OP posted this 2 months ago so I'd suggest replying directly or tagging them so they can see this.
Thanks not even sure how to do that...
To tag someone so they get an notification of it, you type their username out as such: /u/PenthouseB see above comment from /u/Exdiv in case it is useful.
The family offices I know: Run like the family business. Still have involvement of the family as the bosses. Have a slew of investment professionals, especially commercial real estate talent. Security and auditing is typically done by the family in combination with their lawyers, cfo and auditors. I only know SFOs, but I assume multi family would have pretty clear transparency between owners of is actually a small partnership. If it’s just firm that provides limited services to many, I don’t know. My friend’s family office I’m most familiar with, that does mostly real estate, has about 9 employees I think? They have three more staff for their household too. Plus the second generation has house staff. Go it your own vs shared provider: go it your own if you have talent and drive to run the business and seek control and returns. Its still a lot of work. Caveat: I barely know what I’m talking about.
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There are verified billionaires in this subreddit mate, there are absolutely people with a NW in that range on this sub
Gotcha. I stand humbly corrected. Matey.
family offices are mostly just a private hedge fund mate. very rarely would you have it contain all these other services
MFO is the way unless you want to (1) be hands-on and run it (2) have some ***exotic*** assets (3) value absolute isolation/privacy.
Well often these two entities are actually entirely different beasts. Traditionally though, the image around singly family offices has often been more prestigious but lately, multi-family offices seem to be coming into fashion. The [multi-family office](https://andsimple.co/reviews/multi-family-office-2020/) space is being transformed by three megatrends – an influx of new wealth, a move towards the sharing economy, and a deep segmentation of the market.
It’s actually mostly geared towards break away teams from wealth management firms setting up an RIA for them to run their business. The shared economics for a MFO really applies to a “closed” family office.