In 2024, Deloitte published what remains the most-cited report on single-family offices.
From 47 pages of research, the consultancy highlighted eyebrow-raising estimates: There were 8,030 family offices worldwide, up from roughly 6,130 in 2019, and there would be more than 10,720 by 2030. The firm also estimated at the time that offices managed a total of $3.1 trillion in assets and projected that number would reach $5.4 trillion by 2030. At that pace, Deloitte said, family-office assets were on track to surpass the entire hedge-fund industry, about $5 trillion.
Journalists and others latched onto the growth rate relative to hedge funds. Articles were written and it was talked about on television. UBS published its own note about the report.
Today, coming up on two years after its release, the Deloitte report is still regularly referenced on social media, in news articles, and by other industry reports. “Family Offices Have Become the New Power Players on Wall Street,” read the headline of a December article in The Wall Street Journal that referenced the report.
The growth of family-office assets—especially compared with hedge funds—and their desire to invest directly in companies rather than in asset managers' funds have been treated as new phenomena. It’s true that there are more offices, and all types of investment activity related to them have expanded in tandem. But these trends have been happening for a long time, as one associate of a now-notorious financier noted more than 10 years ago.
Since the Justice Department released in January three million pages, 180,000 images and 2,000 videos related to Jeffrey Epstein, journalists have been poring over them in search of new and relevant information about the deceased sex offender. Dozens of articles have been published in recent weeks with new details about Epstein and his relationships.
Included in the files are thousands of emails between Epstein and others, correspondence that has also provided rare glimpses into how investors engaged each other, and their personal finances. For example, there were enough documents and email exchanges to piece together much of former Apollo Global Management CEO Leon Black’s personal balance sheet around 2014. Black looked to Epstein for tax- and estate-planning advice, and employees at his family office, Elysium Management, corresponded with Epstein, Justice Department documents show.
The term “family office” appears hundreds of times in the files because Epstein advised them directly or leveraged that network to source investment opportunities or raise capital—all of which are now well-known and documented.
What hasn’t been reported is a message from more than 10 years ago that describes family offices much as they are today.
On a Saturday afternoon in March 2012, David Stern, a German businessman who worked closely with Epstein and served as a liaison to Prince Andrew, forwarded an email to Epstein about family offices. The sender’s name is redacted, and their identity could not be confirmed by Modus. But the rest of the email can be read, including the subject line: “Friday Letter: Too tough to crack.”
The wealth of the world’s billionaires was already greater than the hedge fund industry, and family offices “are probably never going to be hugely important to fund sponsors,” the sender contended in 2012, more than a decade before Deloitte’s forecast.
Rising interest from offices in sidestepping funds and investing directly in companies was also already happening many years ago, according to the email.
After the global financial crisis, family offices were upset over investment funds—especially real estate funds—that had high fees and too little transparency relative to their performance. The offices wanted a new model for themselves and wanted to invest more directly in properties and companies. That wasn’t going to sound alarms at asset managers either, the sender said. “The thing is, even if family offices en masse are anti-private equity real estate funds, the fund industry may not shed a tear.”
“It is true that family offices are capable of writing out some very large cheques to real estate funds. Those that want to be in funds don't mind taking a call from a manager or placement agent, and they can be less cumbersome than some institutions. For example, there may be just one guy in charge of investment decisions for the family office, making the decision-making process clean cut if he likes the strategy,” the sender wrote.
Still, the 2012 email said that funds rarely build their fundraising around family offices. Sponsors prefer institutional investors over family offices. “The notion that their collective heft can be harnessed in some significant way by fund managers seems a tall order. There's little chance that many of the family offices within that capital pool of $4.6 trillion share a collective approach, given the individuality inherent in the notion of a family office in the first place,” the email says.
“There is a right way to approach them and a wrong way, but the average size of cheques these guys write, at the end of the day, might not even make all the effort worth it, especially as the family office can be so much more demanding when it comes to the level and frequency of communication and information required from the manager.”
Of course, Epstein was not a fund manager and, in 2012, had already made significant inroads with other wealthy investors, or was well on his way to doing so. He was not deterred by the pointed email about the challenges that came with family offices, and neither was his associate. When Stern forwarded Epstein the email, he offered to introduce Epstein to the first president of eBay, Jeffrey Skoll, who was mentioned as an example of a wealthy private investor doing more direct deals.
Just a year later, Epstein seemed to continue having success engaging offices. In a 2013 email, a person named Bill Conover emailed Epstein a Bloomberg article about wealth management firms catering to new billionaires.
“You were light years ahead of these guys,” Conover told Epstein.
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Jobs
- Stryde Search featured job: A single-family office based in Chicago is hiring a CFO. In addition to typical day-to-day accounting and trust and estate-related operations, this executive will work closely with the CIO and help the multigenerational family make decisions about investment and philanthropic activities spanning public markets, private equity, venture capital, co-investments, direct investments in companies, and real estate. It’s a lean office with a fast-paced environment and great culture. It’s a full-time job, and this person will be required to be in the office five days per week. Compensation is competitive and commensurate with candidate experience. For a confidential conversation about the job, reach out to Lisa Slagel at ls@strydesearch.com.
- Bessemer Trust, the multifamily office that oversees $140 billion for 2,500 families, foundations and endowments, is hiring a vice president-principal-director-level private markets generalist. The person will be client-facing and report to the head of alternatives advisory. Compensation is $300,000 and other benefits.
- Mack International has been hired to find a general counsel for a single-family office based in Bryn Mawr, Pennsylvania, and Missouri. The GC will, unsurprisingly, oversee the broad spectrum of legal services required and ensure they are high-quality and cost-effective. The office serves multiple households spanning the third through fifth generations of the family, which founded a successful business over 75 years ago.
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I'll be...
- At the Music Box Theatre tomorrow to see “GIANT,” the story of Roald Dahl. John Lithgow plays him and word is that it’s amazing.
