Rise of the family office for Africa's super rich

Jul 04 2017 19:46

Cape Town – Family offices, which provide a more customised offering than wealth managers and private banks, are a fast growing wealth management segment in Africa and throughout the world.

That is according to AfrAsia Bank’s Africa Wealth Report 2017, which was released on Tuesday. It reported that individual wealth in Africa totalled $2.2trn (R29.16trn).

It said there are about 145 000 high net worth individuals living in Africa, with combined wealth holdings of about $800bn (R10.6trn). There were 7 010 multi-millionaires living in Africa, which was a 19% increase in the last 10 years, it said.

It is this wealth segment that are forming family offices to manage their wealth.

The single-family office generally takes the form of a private company that manages the investments and trusts of ultra-wealthy individuals, normally with net assets of over R1.3bn, and their extended family. This has a small team consisting of a lawyer, an investment specialist and an accountant, the report said.   

Multi-family offices are the most popular and are for families that have between R400m and R1.3bn in assets. These families do not have the economies of scale to establish stand-alone family offices, the report explains. “The multi-family office allows them to share administrative costs,” it said.

Family offices look after managing household staff, property management, philanthropy coordination, managing family education, intergenerational transfer and legal and tax services, on top of the usual investment services, the report explained.  

“Typically family offices are exclusively for family members and their related trusts, foundations, charities, non-profit organisations and family-related investment vehicles.”

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