Strong growth for family offices: Wealth in Transition Report

KPMG

Focus on process, capital growth, and impact investment

  • 70 percent+ want to ensure the longevity of their family office
  • 66 percent aim to grow capital vs 21 percent wanting to preserve capital for future generations
  • 61 percent targeting returns of 6 – 10 percent next five years
  • 43 percent have made impact investments

Wealthy Hot Spots

  • 41 percent of wealthy family office in NSW – average wealth $1.12Bn
  • 31 percent of wealthy family offices in Victoria – average wealth $1.04Bn

Growth and longevity are two of the key themes in a new survey of Australian and Asian family offices from KPMG Australia and The Table Club. The findings highlight that wealth is firmly in the hands of first and second-generation families – with 66 percent focused on capital growth in the next five years. Other results call out the challenges of managing risk and delivering ongoing growth and, more broadly, the rise of the family office during and despite the COVID-19 pandemic.

Completed in Q1 2021, Wealth in Transition – family offices in plain view is the result of a research partnership between KPMG Australia and The Table Club (TTC). It examines more than 80 family offices in Australia, Hong Kong, New Zealand, and Singapore from both quantitative and qualitative engagements, focusing on the wealthiest 500 individuals, Single Family Offices (SFOs) and Multi- Family Offices (MFOs), the organisations that run a number of family offices.

Robyn Langsford Lead Partner Family Business at KPMG Australia said the report shows that family offices are evolving quickly and that both first and second-generation families are focused on the longevity of their office – and on continuing to deliver capital growth. “Notably, the period of the survey, December 2020 to January 2021, was one of abnormality due to COVID-19, and traditional market assumptions were tested,” said Robyn Langsford. “Central bank intervention and massive fiscal stimulus turned a global economic shutdown into one of the strongest bull runs of the 21st century, proving that it is imprudent to ‘bet against the Fed. The growth that family offices achieved in the period is a standout.”

She said the overall findings reflect the important role of family offices as a vital part of the Australian and Asian economies. “First and second generations continue to dominate family offices. They are on the front foot – responding to the need for more formal governance structures and recognising the benefits of bringing in outside human capital to help manage growth and strategy. The key skill will be in their maintaining control and ownership through subsequent generations.”

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