Whats a family office?
Heard that some family offices just buy out companies and optimise them then have an exit strategy i.e. go public sell to large cap PE or sell it for parts if it didn't go to planned, all that typical PE stuff just that they're self funded. Is this the case? Just one rich guy who 'invest' their money like a fund but with their own money and have a small team of experts and counsel?Heard its in CRE real estate as well.The term 'family office' gets thrown around a lot just want some real opinions on its actual meaning and biz activities.
I don’t think there is a single definition that can pin down what a family office does, because they differ vastly among each other. There are “single family” FOs, which are funded by one wealthy individual or family and “multi family” FOs which is a pool of different families (can be a few or many— if many, the office starts to closely resemble any old HNW wealth management advisor). The scope of the FO activities also differ immensely office to office. Focusing just on the investment activities (because some larger FOs include accounting or legal functions or even people to help purchase large ticket items and keep track of spending), it ranges from managing a fund of funds to doing direct investments as you suggested above. The disparity of FO is kinda the point— they can do whatever they (or rather the family/person funding it) want. Usually there is a dedicated team that handles the investments but I guess it can be done by the family itself. Size differs too. Most “true” FOs start probably in the 9 figure range of wealth, but there is no definition. If a family has $15-30 mil to invest, they can just call themselves a FO
Generally speaking—it refers to not taking in outside capital or managing for other individuals money.
So, you have multiple families or one just trying to get returns for their own interest. Limits to this are obviously the type of deals you look at are likely smaller since you don’t have a multi-billion dollar pool to invest from. That said, there are plenty family offices with hundreds of millions that can write some decent sized checks.
Family offices are so slept on - they offer the best comp-to-WLB in high finance if you can get into a decent AUM firm and a good strategy.
My dream job. Hoping to find a place in a few years and enter somewhat mid level / senior and work til retirement at such a shop.
Ones with flexible / wide investment mandate (even public - private mix ive seen) are just awesome. Especially When VC, CRE, etc are considered alongside being somewhat of a placement agent
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