Over the past few decades family offices have largely been able to go about their business well under the media's radar. The view has been that as long as family members are happy and what they do complies with the law, then their activities are no business of anyone else's. On rare occasions when family offices have received inquiries from the mainstream media, the response has been a medium-polite "no comment" at best and, more often, no response at all. Quite right too, you might think, all well and good, that is exactly as it should be.
Unfortunately, in today's world that is a view that looks increasingly anachronistic, if not downright foolish.
That is because it is a fact that family offices are increasingly becoming a power in the public markets. For eminently logical reasons, a growing number of family offices have been opting to increase their market power and pool their talent by merging, and looking after several families together.
Yet, with this size and power comes both responsibility and scrutiny, and that scrutiny will sometimes be of the most unwelcome kind.
It is a fact that when big families, or big groups of families, and big money are combined it presents an almost irresistible combination to the modern media.
The emergence of the internet, with its blogs, chatrooms, and bulletin boards combined with the cost cutting, salary cutting and job cutting that has hit the more traditional media (largely because of the emergence of the former) have together meant that the sort of standards that were once taken as read are now out of the window.
Today a mountain can be created from a molehill in minutes, even seconds, as a rumour, picked up from the bulletin board or a blog, is latched on to by a mainstream outlet. If one opts to run it, and the rumour is juicy enough, others will rapidly follow and all of a sudden the subject of that rumour can find themselves in a whole world of pain.
The key to dealing with this is simple: engage. My comment about the modern media is not so much a criticism as a statement. I worked in it until recently. For the most part, most journalists are and remain conscientious, keen to get the story. Yes, under intense pressure to get the story, for sure but the vast majority still want to get the supporting facts right.
And so it is vital to engage with them, to speak to them, to tell your story so they understand your office, its business and its operations. Sure, if an exciting story comes along they will write it. But strong relationships can help mitigate any damage from this sort of thing when it occurs by ensuring that you will be heard and that mistakes and scurrilous rumours can swiftly be stamped on before they have the chance to really catch hold and inflict serious damage.
It is notable that sovereign wealth funds, which have some similarities to the emerging multi-family office giants in their increasing influence in public markets and desire for limited, or no publicity, are beginning to learn this lesson. Organisations such as the Abu Dhabi Investment Authority, the Qatari Investment Authority and Temasek have either appointed agencies or have hired their own communications people. They have recognised the danger. Family offices would be advised to follow their example.
Related link: Families in the news for all the wrong reasons