A family office is a private company that is created with the intention of managing the assets of a family and ensuring its continuity over time.
Imagine a family that has investments in stocks , bonds , private equity , venture capital, real estate investments, different business structures, investments in art and collectibles among other investments. As the heritage of a family or family group grows and becomes more heterogeneous, the task of managing it in its entirety can become complicated and consume a lot of time and dedication, as well as requiring specialized knowledge. At this point, it is necessary to be able to channel the entire management through a company. And from there, the family office is born, which basically as its translation tells us, is the office of a family. The office through which all asset management is centralized.
Services of a family office
Family Offices, can provide services of different types since sometimes it is complicated that under the same company, everything is channeled. That is why, sometimes part of the management services are managed through other partner companies. The main services provided by a family office are the following:
- Management and advice on investments of a movable nature. That is, investment in stocks, bonds, investment funds and ETFs among others.
- Management and advice of alternative investments. Within this group we can find investment in hedge funds, raw materials , private equity, venture capital, investment in farms and forest resources among others.
- Management and advice on real estate investments.
- Advice on corporate operations such as mergers and acquisitions, capital increases, access to capital markets etc.
- Management and advice on investments related to art and collecting.
- Advice on succession planning and generational relief between the family and the heirs of the family.
- Fiscal advice.
Types of Family Office
We found mainly 2 types:
- Single Family Office:These are created by a single family and are dedicated solely and exclusively to the heritage of this
- Multi Family Office:These are dedicated to managing the assets of various families. Sometimes these Multi Family Office emerge as Single Family Office and over time to take more volume of assets and have economies of scale become Multi Family Office including the management of the assets of more families.
Why create or go to a Family Office?
Imagine that we are a family, we have a high heritage of different types and we need specialized management, why create or go to a Family Office? The main reasons are linked to the intention of growing the heritage, protecting it and bequeathing it to the following generations. In addition, transmitting this heritage can be very expensive at the fiscal level and the following generations could destroy it little by little if they do not know how to manage it. Hence, when these circumstances occur, the figure and services of a Family Office begin to make sense.