Family Office

A Look At Bloomberg Markets' Annual Ranking Of The 50 Richest Family Offices

Eliane Chavagnon Editor - Family Wealth Report November 7, 2014

A Look At Bloomberg Markets' Annual Ranking Of The 50 Richest Family Offices

The number of global individuals with $30 million or more to invest rose by 15.6 per cent to 128,300 in 2013, according to Bloomberg Markets, which has released its annual ranking of the 50 richest family offices.

The number of global individuals with $30 million or more to invest rose by 15.6 per cent to 128,300 in 2013, according to Bloomberg Markets, which has released its annual ranking of the 50 richest family offices.

In terms of year-on-year growth, Miami, FL-based CV Advisors leads the pack, having grown by 40 per cent to $3.5 billion in assets under advisement (all as at end-March 2014 or most recent available). In second place is St Louis, MO-based Commerce Family Office, which grew by 31 per cent to reach $11.2 billion in AuA, while UBS Global Family Office takes third place with $67.6 billion (including transfers from within the bank), having grown 29 per cent year-on-year.

The remaining top seven firms as ranked by year-on-year AuA growth are: Oxford Financial Group (growing 25 per cent to $13 billion); Ascent Private Capital Management (24 per cent to $6.4 billion); Ballentine Partners (23 per cent to $3.7 billion); Fleming Family & Partners – which yesterday announced it has merged with Stonehage - (22 per cent to $6.9 billion); Silvercrest Asset Management Group (21 per cent to $13 billion) Switzerland's FS Finance Suisse (21 per cent to $5.8 billion); and then all growing at 19 per cent: TAG Associates ($8.4 billion); Germany-based Spudy & Co Family Office ($7.9 billion); and Seven Post Investment Office ($3.8 billion).

Bloomberg Markets' Anthony Effinger told Family Wealth Report that, for CV Advisors and Commerce Family Office, “it was growth in the US that lifted assets.”

“The US heartland is definitely booming these days with shale oil going gangbusters, agriculture doing well, and manufacturers returning to use the cheap energy,” Effinger said.

Indeed, the US Wealth Report 2014 - launched by RBC Wealth Management and Capgemini - found a new pattern of high net worth individual wealth creation, among other significant industry trends. 

“Steady GDP growth, reduced unemployment, a falling deficit, and an energy renaissance boosted investor confidence and energized risk appetites in 2013,” said John Taft, chief executive at RBC Wealth Management - US. “These factors contributed to record wealth levels in the US. Over the last five years, some of the strongest growth in wealth occurred in the energy and technology-centric cities of Dallas, Houston and San Jose, indicating that a broader mix of geographies and industries is driving wealth creation in the US.”

But for CV Advisors in particular, “it was all about referrals,” Effinger said. “I have to believe that those [referrals] are key for anyone in this business.” He added that “this is a business that's all about trust, so another client's word is probably gold.”

During Family Office Exchange’s 2014 Wealth Advisor Forum, Alexandre Monnier, the organization’s president, hosted a session on how building a “culture of referral” is a significant and real opportunity for many firms operating in the space (see a feature on this topic here).

“More generally, the rich kept getting richer in 2013/14, and as long as that's the case, the family office business is going to be a good one,” Effinger said.

Asked what he thinks is a healthy/sustainable target for AuA growth at a family office, Effinger said  larger firms are “definitely at a disadvantage in terms of growth because of the law of large numbers.”

“In a bull market year like this, 8 per cent or so is about what you could expect from the biggest firms,” he said, noting that the smallest ten grew between 7 and 40 per cent, with several in the 14-23 per cent range.

The richest

HSBC Private Wealth Solutions, with its main office base being Hong Kong, was crowned the richest family office overall, with $143.5 billion in AuA and representing 334 families. Chicago, IL-based Northern Trust was ranked second with $116.4 billion and 4,340 client families. Both firms grew by 3 per cent year-on-year. In third place is Citi Private Bank, which grew by 8 per cent year-on-year to $100.5 billion in AuA, with an undisclosed number of client families.

Rounding out the top ten family offices by AuA size, are: Bessemer trust ($96.6 billion); BNY Mellon Wealth Management ($81.2 billion); UBS Global Family Office ($67.6 billion); Pictet ($55 billion); CTC | myCFO (BMO Financial Group) ($40.4 billion); Wells Fargo's Abbot Downing ($37.4 billion); and US Trust Family Office (Bank of America) ($36.2 billion).

Asked more generally about the shape of the family office sector today, and what he thinks are the sector's biggest challenges – and indeed opportunities – for growth, Effinger said that post-financial crisis banks seemed to have a new value proposition: “safety in the form of government backing and oversight.” This contrasts to before the financial crisis, when smaller firms “seemed to have an edge with their pitch about open architecture – they wouldn't sell any in-house product,” he said.

He added: “I expect those forces to oscillate, depending on the issues in the market. I suspect that both groups will keep growing as long as US tax policy favors – or at least doesn't impede – the growth of dynastic wealth. Family offices most often thrive during gilded ages – the 1890s, the 1920s, and today. They faded from view in the 1950s through the 1970s, an era of higher taxation. After the recent election in the US, it seems highly unlikely that US tax policy will change any time soon.”

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