North America will still lead the industry but Asia Pacific to see rapid rise
Family offices are becoming a more prevalent part of investment and wealth management, as family wealth surges and their needs evolve.
While there were an estimated 6,130 family offices globally in 2019, just five years later there are around 8,030 and that number is set to increase to 10,720 by 2030, a 75% increase, according to a new report.
Deloitte Private’s Family Office Insights Series – Global Edition shows that family offices in 2024 are managing $3.4 trillion in assets but AUM is set for a 73% rise by 2030 to $5.4 trillion.
The estimated wealth of families with family offices is also set for strong growth, from $3.3 trillion in 2019 to $5.5 trillion today and then to $9.5 trillion by 2030, representing a 189% growth over those 11 years.
“Off the back of gains in their operating businesses and wider investments, the world’s most affluent families have been accumulating wealth at a meteoric pace – and we expect this trend to continue,” says Dr. Rebecca Gooch, Deloitte Private Global Head of Insights, Deloitte Global. “With an expectation that family wealth will nearly triple between 2019 and 2030, this is spurring demand for private wealth management structures, leading to a rapid rise in the size and sophistication of the family office arena.”
The rapid growth of family offices is due to several factors including increased wealth concentration, successful transfers of generational wealth, robust private equity and M&A markets, and the pursuit of more customized investment strategies and services.
“Globally, family offices are expanding rapidly by focusing on their growing presence throughout different areas of the world, asset base, industry impact, and what makes a family office successful,” said Wolfe Tone, Deloitte Private Global leader, Deloitte Global. “As they continue to navigate ongoing economic challenges and geopolitical uncertainty, family offices are expanding their services, maturing their structures, focusing on their talent strategies, and carefully managing their investments to ensure sophisticated and efficient operations for the future.”
The diversity of family offices is evolving too with women accounting for 15% of principals globally as they take on greater leadership roles in family enterprises. However, North America lags most other regions in this regard with 12% compared to 21% in Africa, 20% in Europe, 18% in Asia Pacific, and 17% in South America. The Middle East has 10%.
Women are more likely than men to utilize a family office on a like-for-like basis.
Regional growth
By region, North America and Asia Pacific are the key drivers of the family office landscape with both set for growth. North America currently has around 3,180 family offices (more than half of the global total) but is expected to have 4,190 by 2030, more than double the level of 2019. Asia Pacific has 2,290 but it expected to see the strongest growth and have 3,200 by 2030.
Expected growth also includes family offices that have more than one branch (28% currently) or are planning to (12%).
Evolving environment
The report also reveals what respondents from single offices believe their industry will look like in the future:
- expansion in the number of family offices worldwide (73%)
- they will become more institutionalized and professionally managed (66%)
- they will adopt greater asset class and geographic investment portfolio diversification (55%)
- they will increasingly transition into independent structures (38%)
- they will expand their service offerings (36%)
- there will be a widespread adoption of operations-based digital technology (33%) and sustainable investments/operations (32%).
“In looking ahead, many family offices are staying true to the traditions of past and current generations, while also evolving to meet the needs of future generations,” says Adrian Batty, Deloitte Private Global Family Enterprise leader, Deloitte Global. “As the wealth management sector matures, the enablement for firms to scale-up in sophistication and reach creates further opportunities for growth.”
