Wealth of Family Offices to Grow to $9.3 Trillion by 2030

The family office arena has been growing rapidly, reflecting the rise in family wealth globally, and this growth is expected to continue in the coming years, Deloitte Touche Tohmatsu Limited (Deloitte), a multinational professional services network, said on Wednesday.

In its latest report on growth of global family offices, Deloitte said that 68% of all family offices have been established after the millennium and spurring this global growth is a meteoric rise in family wealth. In 2019, the total estimated wealth for families with family offices was $3.3 trillion and increased by 67% since 2019 to $5.5 trillion. It is further expected to rise to $9.5 trillion by 2030.

This constitutes an expected 189% rise in family wealth between 2019 and 2030. This influx of new money is changing the face of wealth, with most family offices now serving first (41%), second (30%), and third (19%) generation families.

Dr Rebecca Gooch, Deloitte Private Global Head of Insights, Deloitte Global, said that off the back of gains in their operating businesses and wider investments, the world’s most affluent families have been accumulating wealth at a meteoric pace – and we expect this trend to continue.

“With an expectation that family wealth will nearly triple between 2019 and 2030, this is spurring demand for private wealth management structures, leading to a rapid rise in the size and sophistication of the family office arena,” she said.

The surge in popularity of family offices is driven by a combination of factors, including increased wealth concentration, successful transfers of generational wealth, robust private equity and Mergers & Acquisitions markets, and the pursuit of more customized investment strategies and services.

Over 8,000 SFOs

There are an estimated 8,030 single family offices in the world today —a 31% increase from 6,130 in 2019. This number is projected to grow to 9,030 family offices by 2025 (a 13% increase) and 10,720 family offices by 2030, marking a potential 75% rise in just over ten years. 

Region-wise, there are 3,180 family offices in North America, 2,020 in Europe, 2,290 in Asia Pacific, 290 in the Middle East, 190 in South America, and 60 in Africa. The North America region is expected to undergo the greatest growth, with its number of family offices expected to nearly double from 2,210 in 2019 to 4,190 in 2030 – a 90% increase, Deloitte said.

“However, Asia Pacific is gaining considerable steam and has surpassed Europe in terms of its number of family offices (2,290 versus 2,020 for Europe). It is expected to outpace North America in terms of its speed of growth between now and 2030,” the report said.

The rapid rise in the number of family offices, alongside the tremendous growth in family wealth, is also expected to impact family offices’ total estimated AUM significantly. Today, family offices hold $3.1 trillion in assets under management (AUM) and this number is expected to increase by 73% to $5.4 trillion in 2030

In line with the rapid expansion in the family office arena, over a quarter (28%) of family offices now have more than one branch. One-in-ten (12%) plan to establish another branch, with North America and Asia Pacific currently proving to be the most attractive destinations—with 34% of family offices targeting each of these regions (compared to 24% for Europe).

Women Leading

While the gender gap is still prevalent, women are increasingly earning their own fortunes and taking on greater leadership roles within the family enterprise. This is helping to bolster the family office arena, as women now serve as the principals for 15% of family offices worldwide.

Analysing these figures by region, women serve as the principals for 21% of the family offices in Africa, 20% in Europe, 18% in Asia Pacific (with 16% for Asia and 22% for Oceania-based countries), 17% in South America, 12% in North America, and 10% in the Middle East.

The report also said that, on a like-for-like basis, women are more likely than men to utilise a family office for their wealth management. This is suggested by the fact that women constitute 10% of all individuals worldwide with $100 million or more in wealth (with men constituting 90%). However, they represent a more notable 15% of all family office principals with US$100 million or more in wealth (with men reducing to 85%).