European Family Offices

Latest KPMG benchmark compensation data ⬇️ European salaries (before bonus):

68% receive an annual salary review

CEOs most common take home salary: €198,001-€264,000

Family Offices by numbers 🧵

> avergage number of family office staff
> average cost of family offices
> average total compensation, CEO, CIO, CFO Average number of family office staff:

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How much you could earn in a Family Office

Morgan Stanley surveyed U.S. investment-focused family offices. Here are the results: Chief Executive Officer/President

▫ Most senior role setting strategy and overall direction of the family office
▫ Oversees management of the office and staff
▫ Serves as primary liaison with the family

A frustrated family office executive speaks up

The family is on the brink of the third-generation curse

The patriarch could be sleepwalking his family to disaster

A candid interview with Deloitte Private: What is the biggest risk to family offices?

"If you are going to be honest, the biggest risk to most family offices is the family. Sure, there are things like tax, regulatory, and cybersecurity risks—the stuff we executives spend most of our time on. But if you get at the heart of it, the family is the biggest risk. For smaller family offices, it can be about which family member executives will need to report to and who will be making the highlevel, strategic decisions. For larger family offices, it can be more about how to transition from one generation to another or how to prevent different family factions from branching off and dividing the assets into multiple family offices"

Family Offices come in all shapes and sizes, but there are common themes

Six family office archetypes 🧵 1. The Founder’s Family Office

Where the visionary who created the fortune still calls the shots

• FO created after founder's financial success
• Founder drives operations & retains control
• Focus on first-gen wealth & legal/financial structures
• Major challenges: transitioning ownership to next-gen

Career paths in family offices

💼 The jobs
💵 The comp ↓ ↓ ↓ ↓ Chief Executive Officer (CEO)

The big cheese. Directs the overall operations of the family office, setting strategic objectives, and ensuring alignment with the family's goals. Typically, the higher the AUM, the more likely the CEO will be a non-family member

Salary Range: (total compensation by AUM, 25th percentile - 75th percentile, US)

Less than $500 million: $456,250 - $925,000
$500mn - $999 million: $388,000 - $794,000
$1bn - $2.49 billion: $735,085 - $1,315,000
$2.5 billion+: $1,052,679 - $2,475,000

Background: CEOs often come from executive leadership roles in corporations, private banks, investment firms, or other family offices. They should bring experience in strategic planning and operations management

Family Offices by numbers

8 takeaways from Deloitte Private
some mind-blowing numbers ↓↓ 1. Family office expansion explodes

• Today there are 8,030 single-family offices globally, up from 6,130 in 2019 (31%↑)

• Projected growth: 12% to 9,030 family offices next year

• Expected increase of 33% to 10,720 family offices by 2030

• A 75% increase over 10 years

Family office investment in M&A is picking up

• Sharp Decline (2022-2023): Family office direct/M&A investments dropped 53% from an all-time high at the start of 2022 to the third-lowest level of the decade in late 2023

• Rebound in 2024: Deal volume surged 30% in early 2024

• Smaller Deals: Despite higher deal activity, total deal value declined by 11%, indicating smaller transaction sizes on average • Family offices are active in both direct investments and M&A as buyers and sellers

• Their number of exits has declined significantly over the past year

• The total value of exits also dropped in the first half of 2024

Family Office interview questions: 1. Cultural Fit

Do you have any experience working in a similar-sized team? If so, how easy was it for you to work in that close knit environment? If not, how would you try and adapt?

Would you call yourself a natural leader? If so give me an example of a situation in which you have to lead a team through a challenge

Would you want prefer to have total autonomy in your work or would you prefer to work with guidance from others?

Do you enjoy working on a range of tasks or would you prefer to work solely in one position? Why is that?

Have you had any experience with the family’s culture?

How do you like to approach your day? How is your workload and daily/weekly schedule managed in your current/past role?

Are you a person who enjoys challenges? Why?

Have you had experience reporting into multiply managers or stakeholders? If so how did you manage this reporting structure?

If you provide services to family offices, you need to know what is outsourced and what is done in-house

Here's a summary, including a breakdown by AUM: 1. Financial Asset Management

$50M to $500M AUM

The wealthiest families in the world hold secrets that are passed down through the generations

Educational secrets that even the most exclusive schools don’t teach

Wealthy families rarely rely on schools to teach kids about finance

Family offices curate exclusive financial education programs. Programs delivered through private agencies, Ivy League universities and specialist organizations

12 lessons on financial education from Family Offices:

(and tips for any family)

🧵 Lesson 1: be open

Successful UHNW multi-generational families talk about money. They are not coy

It’s part of everyday life to talk about business, wealth and money. Business-talk at the dinner table is encouraged

Wealth brings opportunities and problems. But if wealth is a taboo subject, opportunities will be missed and problems exacerbated

A lot of people think they are helping their kids by shielding them from financial matters. But like any topic, to master it, you need to be consistently exposed to it

UBS interviewed 82 billionaires

Here's what they said about:

• the regions they're investing in
• their asset allocation shifts

1. where billionaires are investing

80% of billionaires see North America as the best investment opportunity over the next 12 months, up 30% from 2023

68% maintain confidence in North America over the next five years

Asia-Pacific (excl. China): 25% short-term optimism, rising to 45% over five years

China: 11% short-term optimism, increasing to 31% over five years

Western Europe: 18% short-term optimism, climbing to 29% over five years

Regions like Middle East, Latin America, Eastern Europe, and Africa are seen as having limited short- and medium-term opportunities

North America Dominance: driven by technological innovation (generative AI, GLP-1 drugs) and energy security, billionaires favor North America for both short- and long-term returns

Shifting Views on APAC and China: short-term confidence in Asia-Pacific and China is muted, but expectations grow over five years

Western Europe’s Moderate Rise: investment sentiment strengthens moderately for Western Europe over the medium term 2. what billionaires plan to invest in

Billionaires' asset allocation shifts:

43% plan to increase exposure to real estate

42% plan to increase exposure to developed market equities

40% intend to increase gold/precious metals exposure

31% plan to increase cash holdings

Interest rate easing:

Views on asset classes are changing as interest rates in the US and Europe may start easing, potentially boosting economic growth

Alternative investments: 38% plan to increase direct private equity holdings

28% plan to increase private equity funds/funds of funds, while 34% plan to decrease

26% intend to increase infrastructure investments

35% plan to increase private debt

Hedge funds are less favored: 27% plan to decrease, while 23% aim to increase

Art and antiques: 32% plan to increase exposure to art and antiques, a significant rise from 11% the previous year

what is a family office: A single-family office (SFO) is a private wealth management firm supporting a single affluent family

It manages investments, tax planning, legal support & other financial matters

Core roles:

1. Protecting wealth
2. Growing wealth
3. Financial Planning
4. Succession Planning
5. Administration
6. Charity and philanthropy
7. Governance

Deloitte Private released a major family office report this week

8 key takeaways
Some truly mind-blowing numbers ↓↓ 1. Family office expansion explodes

• 8,030 single family offices globally today, up from 6,130 in 2019 (31% increase)
• Projected growth: 12% to 9,030 family offices next year
• Expected increase of 33% to 10,720 family offices by 2030
• This represents a 75% increase over a 10-year period

Family Office pay (non-execs), a thread: Portfolio Managers

Focus on growing and preserving the family's wealth through diversified investments in equities, real estate, private equity, and hedge funds

Salary Range: (total compensation by AUM, 25th percentile - 75th percentile, US)

Less than $500 million: $185,000 - $279,375
$500mn - $999 million: $201,250 - $373,750
$1bn - $2.49 billion: $266,251 - $514,000
$2.5 billion+: $324,608 - $643,716

Background: investment management, financial analysis, or related fields. They may come from investment banks, asset management firms, or other family offices

Executive pay at Family Offices, a thread: Chief Executive Officer

Directs the overall operations of the family office, setting strategic objectives, and ensuring alignment with the family's goals. Typically, the higher the AUM, the more likely the CEO will be a non-family member

Salary Range: (total compensation by AUM, 25th percentile - 75th percentile, US)

Less than $500 million: $456,250 - $925,000
$500mn - $999 million: $388,000 - $794,000
$1bn - $2.49 billion: $735,085 - $1,315,000
$2.5 billion+: $1,052,679 - $2,475,000

Background: CEOs often come from executive leadership roles in corporations, private banks, investment firms, or other family offices. They should bring experience in strategic planning and operations management

Scott Galloway on taxes - “Every organization, every corporation does this to the hilt - and so should you”

He highlights 2 legal tactics used by the rich to minimize taxes: Tactic 1: Leveraging Investments Without Selling

Strategy: Wealthy individuals buy stocks and never sell them, instead borrowing against them

Example: Owning $100 in Amazon stock that has appreciated by 50%

Instead of selling the stock and realizing a $50 capital gain (which would be taxed), they borrow against the stock's value

This allows continued growth of the stock while avoiding capital gains tax

Interest on the borrowed amount is minimal compared to the tax burden of selling the stock

Invest, borrow against the investments, and eventually pass them into a trust to avoid taxes when the owner dies

Avoids immediate tax liabilities and enables continued asset growth, making it a highly effective wealth management tactic

European family office compensation: UK - family office salaries (£)

Family offices are not built the same

From conservative allocators to bold venture capitalists

7 investment blueprints: 1/ 🪄 The Legacy Steward:

Endowment Portfolio Archetype

- 3rd, 4th gen+, $3B-$5B+ AUM
- Pursues endowment-like structure
- Prioritizes max diversification & asset retention
- Protecting wealth major focus

Real-life example: Cargill & MacMillan Family Office

Just released:
the latest comp packages at family offices

Are you wildly overpaid or chronically underpaid CEO/President

How family offices around the world incentivize their people

A look around the world

the leaders
the laggards
the surprises

→ USA
→ UK
→ Europe
→ Asia
→ Middle-East USA:

> leading the world in long-term incentive plans
> strong on co-investing opportunities
> carried interest a feature of the US sector