The US Continues To Lead The Global Family Office Market
As many of the world’s largest economies experience a mass exodus of ultra-high-net-worth individuals and families, the United States continues to attract more billionaires than ever before. And, for the wealthy families that already exist within US borders, opportunities for growth continue to abound.
America boasts the most sophisticated family enterprise ecosystem in the world. North American family offices reportedly manage in excess of $1.7 trillion today, while family-controlled businesses make up 35% of the Fortune 500. There are thought to be anywhere between 6,000 and 8,000 family offices across the US alone, and the market is set to experience tremendous growth over the next decade.
The US offers not only a safe haven for domiciling capital but also an unparalleled quality of life. It is a hub of dynamic socioeconomic opportunity, innovation, and fiscal and political security—attributes that are becoming quite the rarity on an international stage.
The Fight for Family Offices
As we previously noted, the $124 trillion moving downstream to the next generation over the next two and a half decades (inflated from the previous forecast of $84TRN by Cerulli Associates) is placing a greater lens over the family office community. As more generations become actively involved in the management of family wealth, so too are external service providers hoping to play a part in the transition. Business schools, as well as accountancy and trust firms across the world, are extending their remit to family offices, and whole nations are joining the race. Jurisdictions such as Dubai, Hong Kong, Singapore, Greece, and Spain are pushing through a string of legislative and tax incentives for family offices to relocate within their borders, but while a select cohort of global hubs set out to attract wealthy families, other nations are experiencing an exodus.
Dovetailing with this generational transition is the global migration of wealth, which has hit record levels. Political tensions in China have cost the country a third of its billionaire population while fiscal policies, including a stringent taxation regime in the UK, are pushing some of its wealthiest individuals to Southern Europe and the Middle East.
Wealthy families are not only looking for the preservation and growth of capital but also a safe environment to raise the next generation with access to high-quality infrastructure, healthcare, and education. These priorities, coupled with considerations such as cost of living and stability, strengthen the US’ position as the most attractive and dynamic market for family offices.
The Global Citizen
This is not to detract from other jurisdictions serving as vibrant places to work or travel. Instead, the rise of globalization, further accelerated by the pandemic, has fundamentally reshaped how wealthy families approach investment and mobility. Wealthy families are no longer tied to financial districts and can instead unlock access to investment opportunities and talent across the world. Many families now span multiple countries, with family councils emerging as a key tool to maintain communication and cohesion across borders. We are witnessing the rise of the global citizen, reflected in record-high applications for golden visas to destinations like Dubai and shared EU citizenship. These moves serve as both a strategic “plan B” and a means of unlocking opportunities on a global scale.
Like all families, however, family offices need a home, and when it comes to looking for a place where families can thrive and their wealth can be sustained across multiple generations, the US is incredibly hard to beat.
Wealthy families in America got wealthier in 2023. The US attracted more billionaires than any other country and, according to Forbes, added $1 trillion in assets over the last year alone.
The Most Attractive and Dynamic Talent Pool
Family offices require human capital with a very distinct set of technical and relationship skills, and what many of these new family office jurisdictions can offer in tax advantages, they lack in depth of talent.
The US boasts the most mature family office landscape in the world, which is equipped with a deep-rooted and rich talent pool, further strengthened by the institutionalized nature of state-side family offices and their increasingly creative compensation structures. These characteristics are changing the typical pathway into family offices, which are now attracting top professionals who once looked exclusively to elite investment firms. It is an incredibly exciting marketplace and also fiercely competitive. The increasing transfer of wealth, combined with a growing number of family enterprises experiencing liquidity events, is driving more wealth into the market and prompting more family offices to manage that wealth while hiring top-tier talent to oversee it.
There are more opportunities than ever before, creating a complex recruitment landscape for family offices to navigate. Enterprising families need to position themselves as the most attractive option for top talent, demonstrating the potential for long-term growth and success–something we are extremely proud to help families achieve at Mack International.
We serve as a trusted advisor to the family office ecosystem in the US and abroad, working with enterprising families to find exceptional executives and ensure they thrive in today’s complex world. For a conversation about how we can assist with your strategic human capital needs, please reach out to our team here.