When diving into the family office landscape, it makes sense to get an overview of the different types of single family offices. The name family office itself is a rough description of investment firms of wealthy families. But actually there are substantial differences between the different types. We introduce you to the classification which makes the most sense in our opinion, splitting single family offices in three different groups.
#1: Single Family Offices As A (Industrial) Holding
The wealth of many families is rooted in the specific family business. While some families sell their stakes in the family business, others make them the center of their wealth. In those cases the holding unites multiple companies, which are often active in a similar business. Cashflows and payouts are generated through dividends of the holding. In our single family office lists we even have a column which marks holding SFOs.
#2: Single Family Offices As An Investment Company
As mentioned before, other wealthy family business have sold their business and are now sitting on huge amounts of money. A good example for this is the German Wirtgen single family office, who has its origins in the sale of the Wirtgen Group for 4.6B€ to John Deere. Such family offices are mostly set up as diversified investment firms with different areas, ranging from real estate to funds and own private equity or venture capital investments. The two most important goals are protecting the family wealth and generating steady cashflows for the family members. In some traditional SFOs, there might be thousands of family members which are receiving payouts from the family investment firm.
#3: Single Family Offices As Opened Investment Managers
A single family office has high fixed costs for its well-trained staff and large offices in major European cities. Especially when investing in capital markets or private equity and venture capital, it makes sense to split those costs between multiple investors. Family offices who decided to “open their gates” are accepting other institutional investors to invest alongside them. A good example is the German Reimann-Dubbers family office, which invests in capital markets and venture capital.
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Picture Source: Dorian Mongel