Family offices focus on growth and longevity

Wealth is in the hands of first and second-generation families involved in Australian and Asian family offices with over 70% of family offices wanting to keep the fund alive for further than one generation.

According to a survey conducted by KPMG and high net worth family office network The Table Club (TTC), which examined more than 80 family offices in Australia, Hong Kong, New Zealand and Singapore, found wealth from family offices was concentrated around Sydney and Melbourne with over 70% of the 500 wealthiest TTC members (TTC 500) residing in these locations, averaging about $1 billion each.

But it was Western Australia who led the pack with an average of $2.5 billion, while also holding the fastest growth in wealth at +31%.

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Growth and longevity were the two key themes of the survey with 66% aiming to grow capital compared to 21% wanting to preserve capital for future generations.

Over half were targeting returns of 6% to 10% over the next five years while 43% had made impact investments.

Robyn Langsford, lead partner family business at KPMG Australia, said the growth that family offices achieved during COVID-19 during periods of massive fiscal and monetary stimulus was a standout.

“First and second generations continue to dominate family offices,” Langsford said.

“They are on the front foot - responding to the need for more formal governance structures and recognising the benefits of bringing in outside human capital to help manage growth and strategy. The key skill will be in their maintaining control and ownership through subsequent generations.”

James Burkitt, TTC founder, said: “Our aim was to learn more about the evolution of family offices in the region, and to understand how participants were managing macro challenges.

“We also wanted to capture the granular detail across a sizeable sample of family offices to unveil secrets of success.”

Over 60% of the TTC 500 primarily generated their wealth in the traditional asset classes of property, investment (which included operational businesses, private equity, credit and other asset classes), and financial services.”

A further 105 members (21%) had an estimated wealth between $100 million to $200 million, with the majority of TTC 500 members having wealth between $200 million to $1 billion.

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