Globally, the number of FOs is estimated to be between 6,500 and 10,500, according to the latest Credit Suisse survey. These offices manage a staggering USD 6 trillion. A substantial number of family offices have emerged relatively recently, whereby as much as 70% of these offices were established after 2000. Since 2010, there has been a striking 35% increase in the number of such establishments.
Investments in Digital Technologies
The FOs realised the potential in other domains like digital finance, sustainability, health tech, and AI. Thus, they are exploring these untapped opportunities, as pointed out by PWC. As investment avenues undergo a transformation, FOs continue to capitalise on the potential in the tech sector. While 2022 witnessed a dip in family office investments, they still contributed to around 33% of global startup capital.
Investments in blockchain or the newest technical applications are not rare. According to the Campden Wealth report 2023, roughly one in four family offices in North America has invested or is expected to invest in the metaverse, one in 10 in NFTs, and over a quarter in Web 3.0.
The global family office market size reached USD 19.7 billion in 2023. According to IMARC Group, an advisor on management strategy and market research worldwide based in Uttar Pradesh, India, the market will reach USD 29.3 billion by 2032, exhibiting a growth rate (CAGR) of 4.37% during 2024–2032.
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The factors that are propelling the market are escalating adoption by HNWIs demanding tailored wealth management and technological advancements enabling efficient and strategic decision-making. Also, the growing focus on socially responsible investments and philanthropy is predicted by the IMARC Group.
Increased adoption by HNWIs
FOs, through their tailored services encompassing investments, estate planning, philanthropy, and more, provide an integrative solution to wealth management. Collaboration with financial experts and institutions, focusing on long-term stability and growth, further promotes the utilisation of family offices. With the continuous expansion of global wealth, the demand for such specialised services is set to remain robust.
The Need for Technological Advancements
Cutting-edge technologies enable the FOs to provide real-time insights, automate intricate processes, and enhance overall client experiences. The ability to leverage technology to align with client preferences, regulatory compliance, and global market trends is playing a pivotal role in shaping the market landscape.
Focus on socially responsible Investments and Philanthropy
HNWIs are aligning their investments with social, environmental, and ethical values. This trend resonates with a global movement towards transparency, accountability, and positive impact, reinforcing the value proposition of FOs. Family offices’ unique positioning to understand and implement these purpose-driven strategies attracts clients who seek meaningful impact through their investments.
