But is this an under-estimation?
Family Offices manage more wealth today than every hedge fund put together. That’s according to a new CNBC segment focused on Family Office investors.
According to the US-based news channel, there are more than 10,000 Family Offices globally that collectively manage more than $6TRN. This is a ten-fold increase in the number of Family Offices that existed in the early 2000s and $2TRN more than the $4TRN estimated AUM of hedge funds across the world.
But how does this compare to Agreus data?
In 2020, we created the Global Compensation Benchmark Report which analysed the compensation, asset allocation, demographics and trends of Family Offices around the world.
In the report, we asked Family Offices to reveal their Assets Under Management and by taking the example of the USA, found that Family Offices across America manage an average of $1.4BN. This is a very crude and over-simplified calculation which we reached by interviewing 149 Family Offices across the USA who told us that they collectively manage $211.4BN.
This included 19% of Family Offices which manage less than $250M, 18% which manage between $251M and $500M, 25% which manage $501M to $1BN, 15% which manage $1.1BN – $2BN and 17% which manage $2.1BN to $5BN. A further 6% told us that they manage $5BN or more.
Again by taking a very crude approach and taking the US average figure of $1.4BN (assuming the US is representative of a global marketplace) and then multiplying this figure by the 10,000 Family Offices estimated to exist by CNBC, one can suggest that Family Offices manage a lot more than $6TRN, perhaps in the region of at least $10TRN and that may also be a conservative estimate.
But with Family Offices increasingly hard to define and little evidence on how much is managed externally with the possibility of duplication, both figures could be entirely wrong.
Do you think $6TRN is an under-estimation?