With the beginning of a new year, it is the perfect time for a retrospective of the top ten EY Family Business findings of 2015 based on our analysis from the global family business survey. Continue reading →
Since the Global Financial Crisis, governments around the world have cracked down on financial markets. Not before time, say those involved in family businesses — many of whom believe that the financial world, or at least parts of it, has become too unruly and, indeed, too big.
But the crackdown might have unexpected consequences for family businesses, or, at least, for family offices managing the wealth generated by large family businesses.
Despite having many substantially wealthy families, there are few single family offices (SFOs) and even fewer multifamily offices (MFOs) in the Middle East. Some estimates put the number of SFOs at between 60 and 75. Whether that’s right or not, most analysts think that there are many more families that could afford to run a family office than are currently doing so.
In most cases, families that own businesses don’t just own the family business. They also have additional assets, such as real estate and liquid assets. With most family businesses, it’s not just about a single asset, it’s about multiple assets. Indeed, in most cases, it’s about multiple family members, often with divergent interests, controlling multiple assets.
Not all families with considerable wealth think that a family office makes sense. When there is still an operational business, families often think that dividends and profits from the business are the best way to preserve wealth. That may make sense for some truly entrepreneurial families, but I think there are a number of reasons why a family office might still make sense even for them.