A typical family office holds less than $500 million assets under management, invests in equities, employs at least 20 staff, who receive a discretionary bonus, and has operated for more than a decade, according to new research by Agreus.
Family office salaries have increased markedly on the previous year, with most surveyed chief executives or managing directors now paid on average more than £300,001, ($389,688) up from £150,001 ($194,845) to £200,000 ($259,791) last year.
Agreus, the UK family office resourcing and recruitment consultancy, launched its latest research of the sector to about 100 family office principles, executives and advisers at the Lansdowne Club in London today.
Despite major global events, including the election of US president Donald Trump and the UK's narrow vote to leave the European Union, Agreus said it was seeing “positive results” from Brexit in the UK, which in turn had positive impacts on ultra-high net worth (UHNW) financial positions.
Family offices were hailed as “an increasingly popular vehicle to manage UHNW wealth and lifestyle,” Agreus said in its Family Office Compensation Benchmark Report, launched in tandem with its report on Family Office Structure Organisational Considerations.
The consultancy's third annual benchmark survey of more than 250 family office clients and contacts found the majority of 36% employed more than 20 staff while 25% employed under five staff.
“The largest family office we interviewed had 15 plus investment managers actively managing the family wealth,” the report said.
The sector appeared well founded in the UK, with 52% of family offices having operated for more than 10 years and 29% for six-10 years.
Agreus said it had seen an influx of new family offices from resident non-domiciled clients, particularly from emerging market countries. While an expected 28% of families originated from the UK and 26% from Europe, the third most common, at 14%, came from the Middle East, ahead of North America. China, India, South East Asia and Africa each were the origin of up to 5% of families.
Researchers found the size of assets under management (AUM) among those surveyed was similar to the global percentage of wealth.
“We have… seen an increase in the number of double digit billionaires setting up their family offices in the UK,” the report said.
The majority of family offices surveyed had AUM of less than $500 million with the second largest, at 22%, managing $1 billion to $2 billion. A notable 14% had more than $5 billion AUM.
Equities (91%), property (86%) and private equity (85%) were the most popular asset classes for family office investments. The report pointed to the drop in value of pound sterling as a driver for the increase in family office investment in equities and UK property.
“Also overseas investors took the opportunity to purchase small to medium-sized companies through private equity transactions,” the report said.