Family Office
A family office is a private organization that manages the wealth, investments, and long-term financial affairs of one family (SFO) or multiple families (MFO).
Allocator relevance: A unique allocator type with idiosyncratic mandates, concentrated decision authority, and highly variable governance and diligence behavior.
Expanded Definition
Family offices exist to preserve and compound generational wealth in alignment with the family’s preferences—often balancing return goals with privacy, control, legacy, philanthropy, and time horizon. Unlike many institutions, family offices are not constrained by standardized cycles, broad stakeholder accountability, or public reporting norms.
Their investment behavior ranges from highly institutional (formal IC, IPS, diversified sleeves) to founder-driven opportunistic dealmaking. Understanding the office’s governance and decision chain is more predictive than labels such as “family office” alone.
How It Works in Practice
Family offices allocate across public markets, private funds, direct investments, and sometimes operating businesses. Many offices rely heavily on trusted networks and advisors, and they may use gatekeepers or chiefs of staff to manage inbound flow.
Decision Authority and Governance
Authority may sit with the principal, a CIO, an investment committee, or a hybrid structure. Governance maturity determines speed, repeatability of process, and mandate stability across generations.
Common Misconceptions
- Family offices are always long-term and patient capital.
- All family offices behave like institutions.
- “Family office” implies a specific AUM level or strategy.
Key Takeaways
- Behavior is driven by governance and decision chain, not label.
- Mandates can be highly personal and change-sensitive.
- Role validation is essential for accurate targeting.