Family offices – here today, gone tomorrow?
A startling statistic about the family wealth sector in the Gulf region, is that only 6% of family offices last more than two generations. This is especially concerning if you consider that in this region alone, they represent a predicted 10-year revenue generation of over $10trillion*.
As we noted in a recent blog it is around 30 years since the first family offices were established, so the simple arithmetic dictates that any founders of Gulf family businesses formed in the 1990s will likely be preparing to hand over the reins to the next generation. This is a critical moment in any family business, one that comes with a mixture of risks and opportunities, such as:
- Succession planning – allocation of roles and responsibilities, and preparing the next generation for leadership roles
- Upholding family values and managing expectations e.g. attitudes towards innovation vs. a more innate conservatism
- Maintaining an edge against new, sometimes international, competitive forces
There is a broader issue at play, however, which revolves around the status of the family wealth sector as a recognised industry in and of itself. Whereas other areas of financial services such as hedge funds have increasingly transparent standards and methodologies, and are now a mainstream sector in their own right, family offices are often shrouded in secrecy, meeting behind closed doors and possibly missing opportunities as a result. There are no doubt opportunities for family offices to collaborate and increase deal flow, based on shared values and investment objectives, if more information about them is known. After all, it is our strong belief that clarity inspires growth.
Through the lens of ClarifiedBy.com
In many ways this is why investment specialists are using ClarifiedBy.com to navigate the investment vehicles within our Family Wealth dataset, where we have identified those entities responsible for managing investments together with information on their ownership, management and holdings.
With such unique access to company and shareholder information, we tasked our business analysts with identifying family offices in the GCC. Our efforts are ongoing, having so far developed profiles for 110 family offices, 62 of which we have uncovered key investment insights, with a further 93 identified family office profiles currently under review.
Fig.1: Split of family offices by country, held on ClarifiedBy.com (sample size 110)
Fig.2: Split of family offices with Insight profiles by country, held on ClarifiedBy.com (sample size 62)
Fig.3: Family Wealth Insights & Network Diagrams
Where possible, we have included an enhanced insight section, highlighting their background and source of wealth, investment strategies, decision making process and identifies investment committee members and key individuals such as the Chief Investment Officer.
*Source: from a study performed by Hubbis & Jersey Finance, 3 Oct 2018.
For more on GCC Family Wealth, read Private family offices: the role of the investment committee and Understanding the Family Offices of the GCC.