Family Firm Growth Set to ‘Explode’ to $9.5 Trillion Under Control by 2030

The name may suggest a mom-and-pop operation, but family offices are anything but.

A new report from Deloitte estimates that such private wealth management advisory firms will control $9.5 trillion by 2030, up 73% from the current $5.5 trillion. Family office expansions are expected to “explode,” with over 10,700 operating by 2030 compared to roughly 6,100 in 2019, and with more and more pushing into competing realms with hedge funds and other investment firms.

With an outlook like that, family offices can probably expect to hear from a bunch of second and third cousins they’ve not aware of.

Bred Winners

The rapid growth in family offices has put the investment vehicles of the world’s richest clans on par with the global hedge fund industry, which data provider HFR said had $4.3 trillion in assets as of the first quarter of 2024. 

This maturation in the wealth management sector means growth in “the pool of talent family offices can hire from, partner with, and utilize to outsource their service provision,” Deloitte said, adding that “family offices are increasingly looking to diversify their portfolios across different asset classes and geographies.” They are also speaking up more and taking stands:

• Mithaq Capital, the family office of the Saudi Al Rajhi banking family, took a majority activist stake in US kids retailer The Children’s Place earlier this year and cleaned house at the executive level. This came months after US hotelier Tushar Patel’s family office took a stake in COVID-19 test-maker Cue Health to push for cost-cutting, and after the Yamauchi family office, for the late Nintendo founder’s heirs, failed a hostile takeover of shipping terminal builder Toyo.
• Family offices have also jumped in on private equity buyouts. The German Viessmann family’s office joined a KKR-led consortium in a multibillion-dollar buyout of renewable energy firm Encavis that was approved in June, while Michael Dell’s family office teamed up with buyout shop Silver Lake in April to take the Ari Emanuel-led talent agency Endeavor Group private.

Breaking the Compact: The 2021 implosion of Archegos Capital, which managed $36 billion at its peak, called attention to the industry’s newfound girth. The meltdown led to the criminal conviction of founder Bill Hwang and contributed to the collapse of Credit Suisse. The family fund’s default on margin calls set off alarm bells about family offices, which are less regulated than other investment vehicles — the SEC tightened private fund rules in August 2023, notably requiring more to be subject to annual audits.