Segmentation By Type (Single Family and Multi-Family Office); By Office Type (Founders’ Office, Multi-Generational Office, Investment Office, Trustee Office, Compliance Office, Philanthropy Office, Shareholder’s Office and Others) and By Managed Net Worth (Less than 50 Million, 50 Million to 100 Million and More than 100 Million) - Global Industry Demand Analysis and Opportunity Assessment 2019-2028
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By Type
The global family office market has been segmented on the basis of type into single family office and multi-family office. The single family office registered the largest market share along with a value of USD 13.39 billion in the year 2019 and is projected to reach a value of USD 19.90 billion by the end of 2028 by growing at a CAGR of 4.50% during the forecast period. The segment is further sub-divided into independent from family business and embedded within family business, out of which, the embedded within family business segment registered the largest market share and further gained a value of USD 8.09 billion in the year 2019. The increasing need for wealth management, backed by the growing number of billionaires is significantly driving the single-family office segment. With several new organizations and companies being launched every day, there is a significant rise in the growth of the single-family offices, which in turn is driving the growth of the segment. Single-family offices either have occasionally adjusted term sheets or standard protection requirements while making investments. The majority of single-family offices provide family services such as accounting, and tax management followed by succession planning.
The global family office market is segmented by regions into North America, Latin America, Europe, Asia Pacific, Middle East and Africa. Among these regions, the market in North America registered the largest share of 44.63% along with a value of USD 7.90 billion in the year 2019 and is further expected to reach a value of USD 11.99 billion by the end of 2028 by growing at a CAGR of 4.74% during the forecast period. Presence of numerous ultra-high-net-worth individuals who are increasingly establishing family offices in order to have greater control over their investments, along with the fact that the financial services for HNIs are not fulfilled by wealth management firms and private banks, are some of the factors raising the demand for establishing family offices in the region, which in turn is anticipated to drive the market growth in North America.CLICK TO DOWNLOAD SAMPLE REPORT
The study further incorporates Y-O-Y Growth, demand & supply and forecast future opportunity in North America (United States, Canada), Latin America (Brazil, Mexico, Argentina, Rest of LATAM), Europe (U.K., Germany, France, Italy, Spain, Hungary, BENELUX [Belgium, Netherlands, Luxembourg], NORDIC [Norway, Denmark, Sweden, Finland], Poland, Russia, Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Malaysia, Indonesia, Taiwan, Hong Kong, Australia, New Zealand, Rest of Asia-Pacific), Middle East and Africa (Israel, GCC [Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman], North Africa, South Africa, Rest of Middle East and Africa).
Growth Indicators
Increasing Wealth of High-Net-Worth Individuals (HNWI)
Growing investment in fashion, technology, real estate and financing has drastically increased the wealth of high-net worth individuals across the world during the past three decades. During the era of Dot Com Boom, many giant organizations grew their assets multiple fold, therefore creating opportunities for other companies across the world. Additionally, the significant growth of billionaires was led by the high returns gained across almost all major asset classes, despite a loss of momentum in the global economy and turbulent geopolitical environment. Moreover, despite the trade wars, slowing global growth and the volatile stock market, the total number of millionaires in the world increased significantly.
Numerous Benefits Associated With Family Office
The family office plays an important role in asset management of HNWI. It further helps the HNWI with succession planning within the business to expand in different regions worldwide. Wealthy families are setting up family offices with a growing interest in sustainability and impact investing. Most family offices are established as a result of the management of succession and transfer of wealth from one generation to another. Moreover, family offices also provide greater confidentiality & privacy and higher returns, and further ensures that there is good governance and better alignment of interest. It further addresses a wide range of complexity of the financial services demanded by the HNWIs. Such factors are anticipated to drive the growth of the global family office market.
Restraints
High Cost of Operation
One of the major challenges faced by family offices is to control the cost of operations, which includes staffing costs, operational cost of running IT systems and the overhead administrative costs. The challenges observed in structuring the family office to maximize cost-effectiveness and expense deductibility is causing great concerns amongst the family office members, which is anticipated to restrain the market growth during the forecast period.
Some of the affluent industry leaders in the global family office market are Bessemer Trust, The Bank of New York Mellon Corporation, UBS AG, BMO Financial Group, Pictet Group, Wells Fargo Bank (Abbot Downing), Walton Enterprises, Inc., Bezos Expeditions, Cascade Investment LLC, and MSD Capital L.P.
In July 2020, BNY Mellon and Deutche Bank collaborated to develop a new API-enabled foreign exchange solution to improve confirmation times for restricted emerging-market currency trades.
In June 2019, UBS AG and Sumitomo Mitsui Trust Holdings, Inc. announced that they have partnered together to launch a strategic wealth management venture in Japan.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: Growing need amongst the families or individuals for outsourcing their entire financial management is one of the major factors that are driving the growth of the market.
Ans: The market is anticipated to attain a CAGR of 4.62% over the forecast period, i.e. 2020-2028.
Ans: The market in Europe is anticipated to display significant business opportunities in the future.
Ans: The major players in the market are Bessemer Trust, The Bank of New York Mellon Corporation, UBS AG, BMO Financial Group, Pictet Group, Wells Fargo Bank (Abbot Downing), Walton Enterprises, Inc., Bezos Expeditions, Cascade Investment LLC, and MSD Capital
Ans: The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is majorly segmented by type, office type, managed net worth and by region.
Ans: The single-family office segment, which is a sub-segment of the type segment, held the largest market share in the year 2019 and is anticipated to reach a value of USD 19.90 billion by the end of 2028.
Ans: High cost of operations of family offices is one of the major factors anticipated to act as a barrier towards the growth of the global family office market.
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