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The Growth of Family Offices

GFG Capital Founder Mauricio Gruener Comments  to FundFire About The Growth of Family Offices

GFG Capital Founder Mauricio Gruener recently commented to FundFire about the growth of the multi-family office channel and the increased interest by investment managers to reach the ultra-high net worth family wealth market.

FundFire reports that “multi-family offices have outpaced all other high-net-worth wealth management channels in recent years, growing at an annual rate of 9.8% over the past three years to reach $694 billion at the end of 2016, according to a Cerulli Associates report.”

And, according to the report cited by FundFire, the growth is only going to continue.

“Cerulli predicts the multi-family-office channel will grow to $1.14 trillion by 2021. Multi-family offices held 8.3% of the high-net-worth wealth management market in 2016, up from 7.2% in 2012. Some of that market share gain has come at the expense of wirehouses and private banks, which have each been losing ground.”

Investment managers are wisely taking note of this trend, and increasing their efforts to reach the notoriously difficult-to-crack family office channel.

“Asset managers have taken note, with the majority of firms interviewed by Cerulli expressing plans to ramp up sales efforts in the multi-family-office channel. In total, 60% of asset managers said they planned to increase distribution efforts in the multi-family-office channel over the next two years,” reports FundFire.

Commenting on the increased interest among managers, Gruener tells the publication “We’re always open to new strategies and we get approached by different institutions and managers to consider their strategy and we have very clear parameters and are able to identify if one of those strategies fits within our model or not.”

He also discussed why GFG Capital doesn’t like value-add programs such as market research or asset allocation advice. “We usually see that independently,” Gruener says. “We don’t like to mix one with the other. We’re very manager focused, and we do not expect, nor welcome, the other advice that we do internally.”

Subscribers to FundFire can see the complete article on FundFire’s website here.