What Does Family Office Mean?
A family office is a type of corporation established for a high net worth family with net worth usually exceeding $100 million to manage their investable assets. Family offices will typically employ advisers to manage the funds in various asset classes including real estate, fixed income, public equities, and private company investments.
Divestopedia Explains Family Office
Family offices are becoming a relevant factor in the private equity scene. Historically, family offices have invested as limited partners in private equity funds, but more recently they are foregoing the private equity intermediary and directly investing into private companies.
The management of a family office needs the expertise of a top-notch adviser and supporting team, and may cost in excess of $1 million per year. Family offices are another direct source of capital that entrepreneurs can access to grow their business, recapitalizations, or outright sales. They provide another private investment avenue that may be a better fit than a strategic buyer or a private equity firm.