Family Office Minimum AUM Threshold
The minimum asset level required to economically justify a single family office, typically $50M-$250M, though $100M+ is common for full-service operations.
Threshold determines which ultra-high-net-worth families likely have dedicated FOs versus those using multi-family offices, private banks, or RIAs—helping GPs qualify target universe.
Expanded Definition
Economic viability varies by service scope and geography. Basic SFOs (investment-only, virtual model) can function at $50M; full-service embedded models typically require $100M-$250M to justify fixed costs (staff, office, systems, compliance). High-cost markets (NYC, SF, London) push thresholds higher.
Below minimum thresholds, families typically use multi-family offices (shared infrastructure) or private bank wealth management (outsourced solutions). Crossing the threshold often triggers FO establishment during liquidity events (exit, inheritance, IPO). Some families maintain SFOs below economic thresholds for privacy or control reasons despite cost inefficiency.
Signals & Evidence
Threshold assessment indicators:
- Public wealth estimates: Forbes, Bloomberg lists; exit announcements; inheritance news
- Service scope: Full embedded operations suggest $100M+ AUM; virtual/lean models may operate at $50M-$100M
- Staffing: 1-2 people = likely below threshold or virtual model; 5+ employees = likely $100M+ AUM
- Office infrastructure: Dedicated office space, professional service providers (auditor, counsel) = likely above threshold
- Transition markers: Recent liquidity event + FO job postings = likely crossing threshold
Decision Framework
- Establishment decision: Made during/after liquidity events when investable assets crystallize and privacy/control value exceeds cost
- Service scope tradeoff: Families below threshold decide: pay premium for SFO control vs use cost-efficient MFO/private bank
- Geographic variation: $100M threshold works in lower-cost markets; $200M+ may be needed in expensive metros
Common Misconceptions
"All $100M+ families have SFOs" → Many use MFOs or private banks for efficiency; SFO is a choice, not automatic. "Below threshold = not serious" → Families using quality MFOs can be sophisticated allocators with strong diligence. "Threshold is fixed" → Varies by service needs, geography, and family priorities; some operate below for privacy despite costs.
Key Takeaways
- Use $100M+ investable assets as rough threshold for SFO likelihood, but verify through OSINT (staffing, infrastructure, service scope)
- Families below threshold typically use MFOs or private banks—don't exclude them, but route outreach to advisor/platform
- Threshold-crossing events (exits, IPOs, inheritance) create FO establishment windows with new allocation capacity