Family Offices | Protecting the Wealth of the Super Rich

Family Office Consultants

Family Offices & The Super Rich

( I have worked with many family offices in the past within a hedge fund idea generation, HNW introduction and hedge fund marketing capacities. Most have been even more secretive over the past 3 months as the financial crisis has worsened and ultra-wealthy family members shy from poor press on the performance of their investments.

Here is a recent article I saw just come out about family offices and how they are fairing in the markets:

Charles A. Lowenhaupt spoke first on the conference call, informing 15 members of the very rich family that employs him that he could not in good faith promise that their fortune would remain intact through the economic crisis, then gently reminding them to be grateful for their health, loved ones — and the hundreds of millions of dollars they still had.

Then five of Mr. Lowenhaupt’s employees, each of them intimately familiar with the family’s investment portfolio, real estate holdings, trust funds and charitable foundation — as well as the psychological particulars of the people on the call —took turns describing the ramifications of the market turmoil. Throughout the 30-minute telephone conversation on one of the many recent days of triple-digit declines in the Dow, there was silence from the wealthy family members. Mr. Lowenhaupt had put their lines on mute.

“I didn’t want family dynamics to get in the way,” he explained. “The way the patriarch feels the obligation to act like the patriarch. Nobody had to play out, ‘I’m the smartest.’ ”

Mr. Lowenhaupt, 61, is chief executive of Lowenhaupt Global Advisors, an 18-employee firm that serves as the “family office” for four multigenerational clans whose ultrawealthy members are spread throughout the United States and Europe — a rarefied perch from which to observe the financial fallout. He is a lawyer, investment manager, estate planner, philanthropy expert, intergenerational mediator and a hopeless proselytizer on the near impossibility of simultaneously being rich and happy, who makes sure his clients’ bills are paid, homes are staffed, and annual family meetings planned.

Family offices were once, like ancestral country manors and inherited middle names, considered the province of old money (the Rockefeller family office is probably the best-known model). But the rise — and growing concentration — of astronomical wealth over the last couple of decades has expanded the demand for dynasty-like service operations. Wealth management experts estimate that there are now as many as 4,000 family offices nationwide handling a mix of financial planning and high-end concierge services, with the minimum net worth of clients in the nine-figure range. Which means, at least in terms of numbers, the people who have the most to lose. Read more...

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