General information only. This is not legal, tax or investment advice. Check the rules that apply to you with a qualified adviser.
Definition
A family office manages money and related affairs for a family, rather than for outside clients. Its work usually covers investment management and often extends to tax and estate coordination, philanthropy, governance, reporting and household administration.
Types of family office
Single family office
Serves one family and is usually owned and controlled by that family. Decisions tend to sit with a principal, a small investment team or an investment committee.
Multi-family office
Serves several families. Many began as one family's office and opened to others; some are run by banks or advisory firms. In the US, many are registered investment advisers.
Virtual family office
Coordinates outside providers, such as accountants, lawyers and investment managers, instead of employing a full in-house team.
How family offices invest
There is no standard approach. Offices may invest through funds, make direct investments in private companies, buy real estate, or co-invest alongside other families. Time horizons are often longer than a fund's, because there is no fixed fund life.
A note on US regulation
In 2011 the SEC adopted its family office rule, which excludes qualifying single family offices from registering under the Investment Advisers Act. That is one reason many single family offices publish little about themselves.