What is a family office and how do they invest?
Short answer
I define a single family office as a holistic wealth management solution dedicated to serving one affluent individual or family. Its purpose is to coordinate investments, service providers, operations, and other important financial matters around the family's objectives. Family offices can invest in public markets, real estate, private businesses, funds, and direct acquisitions. However, every family has different priorities, so understanding its specific investment strategy is essential.
Checklist
- Understand the distinction between single family offices and multi-family offices.
- Recognize that family offices often coordinate multiple professional advisors.
- Learn whether the family prefers direct investments or funds.
- Understand its preferred industries and investment characteristics.
- Identify whether it wants passive investments or active ownership.
- Recognize the importance of long-term wealth preservation.
- Understand how investment committees and governance influence decisions.
- Research the family's investment strike zone before presenting opportunities.
From my talks
"A single family office is a holistic, full-balance-sheet wealth management solution for an affluent individual or family."
I have worked with families that prefer owning real estate and operating businesses directly rather than investing exclusively through funds.
One example from our family office investing discussions involves families acquiring profitable operating businesses because they already understand how to manage and grow companies.
Other families prefer to partner with experienced operators or co-invest alongside other family offices. In our co-investing discussions, family office representatives described working with partners who contribute specialized industry knowledge.
This illustrates an important point: a family office is not simply an investor with a large bank account. It is an organization making decisions based on the objectives, expertise, and priorities of the family it represents.
Sources How to Start a Family Office, Chapter 1: Why Start a Single Family Office?; Structures and Co-Investing How to Partner with a Family Office to Close Your Next Deal; Family Office Fundamentals Workshop Miami
What to do next
- Learn the differences between direct investing, fund investing, and co-investing.
- Research the investment priorities of any family office you hope to approach.
- Prepare questions that help determine whether your opportunity fits those priorities.
Related questions
- How do I get in front of family offices?
- What do family offices look for in a deal?
- How do billionaires decide what to invest in?
Try the Family office fit check. See all family offices questions.
