This week, we had the pleasure of joining the Global Family Office Community in London at the 8th annual Global Family Office Conference.

We joined more than 200 Family Office Professionals, Principals and Family Members to discuss the Family Office of the Future which included a heavy focus on innovation, regulation and talent.

While the event was under Chatham House Rule, we thought we would share a summary the key conversations had on the day which you can find below.

  • RO – I,T,H,S,R

Return on Investment (ROI) will find its way into most conversations within Family Offices but one panellist asked the audience to focus more on Return on Time, Health, Society and Resources.

The pandemic is responsible for shifting a lot of perspectives, from the sudden realisation of mortality with a lot of Principals to understanding the value of balance with candidates and a need to measure impact within investment teams. There was a reminder throughout the event to not focus on return in isolation with employee health, happiness and time taken just as seriously.

  • Global Mobility

One speaker gave a glimpse into the future by offering his predictions for the year 2050. His Family Office is working backwards to ensure as a team, they are investing in the areas today that will make profit and have purpose tomorrow.

The secret to his time-traveling ability was demographics and how population trends paint a picture of the future which, when delving into the details, might sound quite alarming. He offered a conclusion that an ageing population paired with the trend of having less children means we will have an older population of people unable to care for themselves and a declining younger population to keep the economy turning. His answer to this problem was global mobility and the freedom of trade.

He looked at population trends on a global scale and compared this to advanced and advancing economies with the USA leading the ‘advanced countries’ list and ‘advancing countries’ consisting of the likes of India. The USA while topping the first list is also the most under populated country in the world when it comes to under-25 year olds and when contrasting this to ‘advancing countries’ such as India, which is one of 9 countries to boast 50% of the world’s population growth, the speaker emphasised the importance of global mobility and the freedom of trade.

In his words, it is a case of “knowledge capital vs. human capital.”

  • New Investments

Each panellist was asked where their Family Office was investing this year, these were the five that we found most interesting:

  • Agritech such as Bitcow, digitising the beef trade in rural England
  • Health such as AI-led trials used to determine which clinical drug could work for a particular patient from the offset
  • Digital Assets such as cryptocurrency
  • Space with NASA’s $15BN budget now being matched by private capital
  • Real Estate.

Real Estate took a lion’s share of the conversation with a Family Office Principal offering the two sub asset-classes of UK film studios and, echoing the conversation around demographics, retirement living. These are two areas, he believes, are in great demand and offer great potential for interested investors. A UK Property Lawyer also offered a recent case study of John Lewis hoping to generate 40% of their returns from real estate next year, diversifying outside of retail and offering a general consensus that real estate is stronger than ever before.

  • Talent

Agreus Co-Founder Tayyab Mohamed offered his take on post-pandemic trends which he split into three buckets:

  • Risk Appetite: Family Offices have upped their risk appetite with more investments being made into new asset classes and more direct investments than ever before. This he described is having a seismic shift in the hiring requirements for Family Offices with new analysts required and new compensation structures needed to both attract and retain them.
  • Change in Candidate Attitude: Benefits that were once considered luxury nice-to-haves for candidates are now considered non-negotiables. This has been primarily driven by the move to remote working and remains in place due to the array of new opportunities on offer for the top talent. This he believes requires Family Offices to be more open-minded than ever before and stated that “productivity does not depend on your presence in an office.” This he concluded would save Family Offices from losing their top talent.
  • Professionalisation of Family Offices: Family Offices are becoming more professionalised in their approach to wealth – focusing more on structuring their organisation and ensuring they are compensating their professionals correctly. This is helping Family Offices to become attractive places to work for the younger generation of professionals, no longer considered an ideal end of career and pre-retirement move.

The key message: With opportunities outweighing unemployment, Family Offices need to work harder than ever before to retain their top talent.

  • The Future

Each panellist offered their predictions for what the Future of Family Offices might look like and these are the key trends we took away:

  • Global mobility will continue but it will get harder before it gets easier. A regulatory expert offered his perspective on why countries will require subsistence making the transition for work very disruptive.
  • Physical Family Office spaces will evolve, becoming less about density and more about an experience, offering staff a new environment to escape to for the days they work on-site.
  • Digital Asset classes will continue to merge with traditional asset classes such as Bitcow within Agriculture, promoting a circular economy.
  • Family Office professionals will stay in the profession much longer, continually upskilling as we cope with an ageing population.
  • Economies will become digitised.
  • We will see a great deal more cross-system thinking.
  • Transparency will dawn in an age of more regulation.
  • Family Offices will continue to diversify their portfolios, not necessarily looking exclusively to niche or new asset classes but those with set precedent such as real estate.

Other conversations had on the day included parenting and the need to build agency and capacity in the next generation, cyber security and the need to integrate information technology and regulation, why sanctions are continuing the conversation started by Archegos more than a year ago.

Do you agree with the predictions for the Family Office of the Future?