How Family Offices Became the Backbone of Generational Wealth
The origins of the family office can be traced back to the European Renaissance, when powerful merchant and banking dynasties established structured mechanisms to manage their wealth and affairs. Prominent families such as the Medici oversaw commercial enterprises, political influence, landholdings, and inter-generational succession through trusted advisers. While informal by modern standards, these arrangements represented the earliest foundations of the family office concept.
The modern family office model emerged in the late nineteenth century during the American industrial era. A defining milestone was the establishment of the Rockefeller Family Office in 1882. For the first time, family wealth was managed in a professional and institutional manner, independent from banks, with a clear multi-generational mandate focused on preservation, growth, and legacy.
Following the Second World War, increasing globalisation of wealth, growing tax complexity, and the widespread use of trusts, foundations, and holding companies fundamentally reshaped family offices. They evolved from primarily administrative entities into strategic governance platforms, overseeing cross-border investments, legal and tax coordination, family governance, and next-generation education. This period also marked the early emergence of multi-family offices (MFOs), offering shared expertise and infrastructure to multiple families.
Today, family offices have become a mainstream global wealth management model. Modern family offices integrate alternative assets, private equity and venture capital, ESG and impact investing, digital assets, and robust regulatory compliance frameworks, including AML/CFT, CRS, and FATCA. They are increasingly supported by formal family constitutions, councils, and governance structures.
According to estimates from the Economist Intelligence Unit and DBS Private Bank, there are approximately 10,000 single-family offices (SFOs) and 5,000 multi-family offices worldwide, highlighting both the scale and enduring relevance of the family office model.
When Wealth Becomes a Full-Time Responsibility
According to the Agreus Group 2023 Global Family Office Compensation Benchmark Report, the primary reason families establish a family office is to manage and preserve family wealth. This involves coordinating a wide range of activities aimed at safeguarding and growing financial assets over the long term.
A family office serves as a central platform for financial management, providing a unified strategy for monitoring investments and ensuring alignment with the family’s objectives. It also delivers highly personalised services tailored to each family’s unique needs, values, and circumstances.
In many cases, the need for a family office emerges organically. As wealth grows, families often find that managing their affairs becomes a full-time responsibility. Multiple advisers may offer fragmented or conflicting advice to different family members. A family office brings structure, clarity, and consistency, helping families define priorities, establish decision-making frameworks, and coordinate how wealth is invested, managed, shared, and ultimately transferred.
Beyond financial oversight, family offices play a critical role in preparing younger generations for the responsibilities of wealth. They help foster a shared family culture and long-term vision, encouraging open communication around money, values, and stewardship, topics that are often difficult to address. Ideally, the transfer of wealth is accompanied by the transfer of responsibility, ensuring sustainability across generations.
Family offices also oversee diverse asset portfolios, including marketable securities, commercial real estate, private investments, and alternative assets. Key family office professionals are responsible for developing balanced investment policies, supervising external advisers, if any, and monitoring performance and risk. Depending on experience and interest, family members may actively manage certain investments, with the family office providing governance and administrative support.
For entrepreneurial families, direct investing often forms an important part of the strategy. This includes investments in private companies or real estate aligned with the family’s expertise and long-term mission, offering both strategic involvement and the potential for enhanced returns.
Why Families Look Beyond Traditional Private Banks
Wealthy families increasingly look beyond traditional private banks as their needs become more complex and long-term in nature. While private banks play an important role in investment execution and day-to-day banking, they are often not designed to manage the full spectrum of family wealth across generations. Below is a brief comparison:
| Aspect | Family Office | Private Banking |
|---|---|---|
| Focus | Family-centric, long-term | Product-centric |
| Advice | Independent and integrated | Often linked to bank products |
| Scope | Wealth, governance, and legacy | Primarily financial |
| Time Horizon | Multi-generational | Short to medium term |
| Control | High | Moderate |
How Family Offices Allocate Capital in a Changing World
According to the PwC Global Family Office Deals Study 2025, family offices have significantly increased their allocation to venture capital over the past decade. Venture capital investments rose from 17% in 2015 to a peak of 38% in 2022 and remained strong at 31% in the first half of 2025.
Over the same period, real estate allocations declined from 48% in 2015 to 26% in 2023, reflecting a greater willingness among family offices to pursue higher-risk, higher-return opportunities. Private equity has remained resilient, accounting for 19% of total investments in 2025, underscoring a flexible and well-diversified investment approach.
Technology-driven sectors, particularly artificial intelligence, machine learning, and software-as-a-service, have attracted significant family office capital. These sectors received high levels of venture capital investment between July 2023 and June 2025.
Family offices continue to favour direct investments in operating companies, startups, artificial intelligence, and healthcare, driven by the desire for greater control, transparency, strategic alignment, and long-term value creation. Club deals are also gaining traction, allowing family offices to co-invest alongside peers. This trend is partly driven by the “NextGen effect,” as younger family members prefer collaborative investments with like-minded partners.
The Next Generation of Family Offices
As younger generations assume a more active role in wealth management, they are reshaping family office strategies with an emphasis on technology, diversification, and sustainability. Their approach is characterised by:
- Digital fluency: adoption of AI, blockchain, and fintech solutions
- Higher risk tolerance: increased exposure to startups, emerging markets, and digital assets
- Sustainability focus: prioritisation of ESG, climate initiatives, and impact investing
- Data-driven decision-making: use of analytics and AI for investment and risk management
Despite global challenges such as geopolitical tensions, political instability, economic uncertainty, and trade barriers, family offices remain resilient. According to the Goldman Sachs 2025 Family Office Investment Insights Report, family offices are expected to:
- Increase allocations to private equity
- Increase exposure to public equities
- Reduce cash holdings and redeploy capital into risk assets
- Expand investments in private credit
Far from their traditional reputation as conservative and risk-averse, family offices are increasingly demonstrating agility and a forward-looking investment mindset. In an environment marked by uncertainty, they are proactively identifying and pursuing emerging opportunities for value creation, positioning themselves to benefit from new and expanding sources of long-term growth.
To explore how a family office approach can support your long-term wealth and governance objectives, speak with our team.
Kaviraj Nuckched
Business Development Manager – JurisTax
- (230)465 5526
- knuckchedee@juristax.com
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