The number of single family offices has increased by almost a third (31 per cent) since 2019 to 8,030, with this growth expected to continue in the coming years, a report by Deloitte Private has revealed.

Deloitte projected the number of family offices to continue rising by 12 per cent next year to 9,030, and by a third (33 per cent) to 10,720 family offices by 2030.

This marked a 75 per cent increase over the approximately 10-year period, the report noted.

There were an estimated 3,180 single family offices in North America, compared to 2,290 in Asia Pacific, 2,020 in Europe, 290 in the Middle East, 190 in South America, and 60 in Africa.

Nearly three quarters (73 per cent) of respondents to Deloitte’s survey predicted that the number of family offices worldwide will continue to grow.

Wealth

This increase in the number of family offices is reflected in the estimated wealth for families with family offices, which rose from $3.3trn in 2019 to $5.5trn this year, representing a 67 per cent increase over five years.

Deloitte forecast this wealth to grow by another 26 per cent to $6.9trn by 2025 and by 73 per cent to $9.5trn by 2030.

“This is a notable 189 per cent rise between 2019 and 2030,” Deloitte noted.

“Following a similar trajectory, family offices’ total estimated assets under management (AUM) currently stands at $3.1trn and is expected to rise by 73 per cent to $5.4trn by 2030.

“The region that is expected to experience the greatest increase in family wealth and family office AUM is North America, with a projected average rise of 258 per cent between 2019 and 2030, followed by Asia Pacific at 208 per cent.”

Expansion

The report also showed that the establishment of family office branches was trending, with 28 per cent of family offices now having multiple branches.

Nine in 10 family offices in North America and Europe stuck to their own region when expanding, while 61 per cent of family offices in Asia Pacific went abroad, setting up secondary branches in North America (38 per cent) and Europe (23 per cent).

More than one in 10 (12 per cent) family offices plan to set up another branch, with North America and Asia Pacific the most attractive regions at 34 per cent each.

Deloitte stated that the global surgency of new wealth in recent decades was “redefining the face of wealth”.

Nine in 10 family offices serve first (41 per cent), second (30 per cent), or third (19 per cent) generation families, with 68 per cent of all offices being established post-2000.

Only one in 10 family offices now represent families in their fourth generation or older, which Deloitte stated raised concerns over families’ ability to retain their wealth long term.

Governance and structure

Family offices were also found to be valuing governance, with 73 per cent having established boards.

Their boards average four members, with 58 per cent being family members and the remaining 42 per cent being outside professionals.

Portfolio management (30 per cent) and direct investing (22 per cent) were taking up the bulk of family offices’ time, while 19 per cent of time was spent on administration and compliance duties, 15 per cent on supporting the operating business, and 7 per cent on each next-generation training and philanthropy.

Family offices in North America were found to spend more on administration and compliance duties than any other region.

Two-thirds (66 per cent) of respondents forecast family offices would become more institutionalised and professionally managed, while 55 per cent felt their portfolios would become more diversified across asset classes and geographies.

Meanwhile, 38 per cent believed family offices will increasingly transition from being embedded in the family’s operating business to become independent structures, while 36 per cent expected them to expand the number and extent of services offered, and 33 per cent felt there would be a widespread embrace of operations-based digital technology.

A third (33 per cent) forecast a widespread adoption of sustainable investments/operations.

The report also showed that women now serve as the principals of 15 per cent of family offices, which Deloitte said reflected a “drive to create their own wealth and to take on leadership roles within the family enterprise”.

“In North America, women are the principals of 12 per cent of family offices, in Europe 20 per cent, Asia Pacific 18 per cent, the Middle East 10 per cent, South America 17 per cent, and Africa 21 per cent,” the report noted.

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