What is a Family Office?
In a nutshell a Family Office is a generally one or more lawyers or accountants office who manage and invest large sums of money for their very wealthy clients.
Why should you be interested in them? Well quite simply they have a lot of money to invest and like to see well crafted proposals with good returns so that they can safely and securely invest their clients money in any given financial year.
At Angels Den we have relationships with many of these offices and many of them specialise in specific sectors including (but not limited to) online businesses, FinTech, Food and Drink, Clean Energy and property.
The Bill and Melinda Gates Foundation is probably the most well-known Family Office in the world. As of April 2016 Bill gates was the richest person int he world with a wealth of $77 billion and his Family Office have donated, loaned and spent some $28bn so far.
Other well known Uber-wealthy FO patrons include Sir James Dyson, Oprah Winfrey, Hans Rausing (TetraPak), The Duke of Westminster and Sainsbury’s and The Goldsmith Family.
There are now over 1,000 Family Offices in the UK managing more than £700bn in assets and London is a premier global hub for many of these.
A Family Office might employ from 3 to 12 core staff including a Chief Executive and chief investment officers who may be accountants, ex senior bankers and investment analysts. As well as lawyers and accountants, some of the major banks and estate agents may also have dedicated teams to look after Family Offices.
There is even an annual Family Office conference and an association.
Some of the more successful families share the vision and purpose of their wealth (think Cadbury’s and The Rowntree Foundation) where they plan for the growth of their funds over future generations. They will have set up specific constitutions setting out the rules and regulations for family gatherings. Some of their rules include having new family members who join by marriage sign pre nuptial agreements to protect family capital. New spouses would also only receive monthly stipends and never large capital sums. The rules stipulate how succession is worked out and how inheritances are planned as well as what happens when family members are not interested in the family business or want to leave.
I read that family offices do not just prepare the money for the children but they also prepare the children for the money. The family office association said that children could be incentivised to generate their own wealth by match funding; giving them a sum from the family’s assets equivalent to their independent earning. If children are not interested in following the family business, they may be incentivised by being encouraged to gain qualifications or to join specific professions and they might receive bonuses once qualified.
I know of a family that said their children could only participate in the Family Office or have a say in the investment of funds if they qualified as solicitors or doctors and worked at that profession for at least 5 years.
So Family Offices are a large part of the investment fraternity and in the right circumstances they can provide large amounts of investment funds in relatively quick time. The good news is that we know quite a few and can make approaches if the proposal fits their criteria.
This and many more subjects will be expanded on in the Raising Angel Finance Course on the 30th of April or the 18th June 2016 in Peterborough. For more information contact; karlenepartridge@progressiveproperty.co.uk
Ray is a shareholder and Regional Manager for www.AngelsDen.com and Property Angels Den where investors are introduced to entrepreneurs or developers seeking finance. If you have a proposal click here: Application form page: http://www.designedliving.co.uk/investment-application-form.html
If you are interested in becoming an Angel Investor, Click here: http://www.becomeanangel.com
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