HSBC’s ultra-high net worth offering is the biggest multi family office in the world, according to Bloomberg Markets, which has produced its annual ranking of the sector.
The UK-based bank’s private wealth solutions unit, which deals with HSBC’s wealthiest clients, had assets under advisement (which includes assets under management plus nondiscretionary assets such as trusts) of $137.3 billion (€103.6 billion), up 11% from last year.
Northern Trust ($112 billion) and Bessemer Trust ($77.9 billion) came in second and third in the rankings, which for the first time in their three-year history are the magazine’s cover story.
Bloomberg Markets reporter Anthony Effinger says the family office sector is booming at the moment and the yearly rankings trigger more interest than any other story he writes for the magazine.
“The folks who are calling are all investment managers or service providers who want to help manage these big fortunes.”
Effinger says it is the fastest growing firms, rather than the richest, that provide the most interesting figures. He says despite big banks’ strong presence at the top of the list, the trend for independent firms has accelerated following the financial crisis.
According to the list, US-based CV Advisors, with 41 families, saw its AUA grow 100% year-on-year to $2.5 billion in this year’s ranking. Operating out of Miami, the firm has been wooing rich Latin American families.
In second place in terms of growth was Ascent Private Capital Management, with 60 families, which saw AUA up 96% to $4.4 billion. Its clients must have $50 million, but unlike other firms, its president, Michael Cole, is willing to count the value of the family business in that figure.
Effinger says the family office sector is thriving as baby boomer business owners nearing retirement age sell or list their companies and enter “a huge liquidity event”.
“That’s where a lot of these family offices and banks see opportunity. When that wealth gets unlocked through an IPO or a sale or whatever, they want to be there to help manage that money.”
To a lesser degree, Effinger says, young tech types, from the likes of Facebook, are also among the new rich that family offices are courting.
The results were compiled through research by the Bloomberg Rankings team, which surveyed more than 1,000 multi family offices.