Entrepreneurial leaders:
Building a highly specialized and competitive business over several decades can generate enormous wealth for the founding families involved. According to a Wharton and Singapore Management University Study, 78% of family offices were built from wealth accumulation generated from their majority stakes in entrepreneurial businesses.
Multiplying Wealth over the Long-Term:
According to the same study, these same families understand the importance of incremental improvement regarding their investable assets. For a $100M net worth family office, just a 1% improvement in portfolio performance through these activities translates to $1,000,000 gains in value annually. And just a 1% improvement in portfolio performance over a 10 year period through these activities translates to $11,000,000 gains in value.
Investment returns compound over the decades. When a family compounds their investments at 14% over a thirty year time horizon, the multiple on the initial investment is 51 times its original value. Therefore, a $100M net worth family could grow to a net worth of $5.1 billion net worth if they were able to compound at that rate over a thirty year period.
Drivers of Investment Performance:
Expanding family offices should have a long-term time horizon and a multi-generational outlook. Although many believe the ultra-wealthy want to engage in risk-averse, low-returning investment strategies, the family office study of interest reveals that 85% of American family offices prefer balanced, growth, or aggressive growth investment strategies.
Family offices founded by high-achieving, perfectionist entrepreneurial leaders often desire not only to win through their primary business, but also their investment portfolios as well. Given this backdrop, asset allocation and fund manager selection were reported as the top 2 priorities among the family offices participating in the study. With this logic in mind, the ultra-wealthy often seek out expert strategic partners to help them with asset allocation and fund manager selection. In fact, the study reported half of family offices over $100 million outsource their manager selection and asset allocation.
If you are interested in partnering with Endowment Research Group for your family office, please do not hesitate to reach out to ERG Chief Investment Officer, Mark Bennett at mbennett@endowmentresearchgroup.com and/or President, Zafiris Vartis at zvartis@endowmentresearchgroup.com
Building a highly specialized and competitive business over several decades can generate enormous wealth for the founding families involved. According to a Wharton and Singapore Management University Study, 78% of family offices were built from wealth accumulation generated from their majority stakes in entrepreneurial businesses.
Multiplying Wealth over the Long-Term:
According to the same study, these same families understand the importance of incremental improvement regarding their investable assets. For a $100M net worth family office, just a 1% improvement in portfolio performance through these activities translates to $1,000,000 gains in value annually. And just a 1% improvement in portfolio performance over a 10 year period through these activities translates to $11,000,000 gains in value.
Investment returns compound over the decades. When a family compounds their investments at 14% over a thirty year time horizon, the multiple on the initial investment is 51 times its original value. Therefore, a $100M net worth family could grow to a net worth of $5.1 billion net worth if they were able to compound at that rate over a thirty year period.
Drivers of Investment Performance:
Expanding family offices should have a long-term time horizon and a multi-generational outlook. Although many believe the ultra-wealthy want to engage in risk-averse, low-returning investment strategies, the family office study of interest reveals that 85% of American family offices prefer balanced, growth, or aggressive growth investment strategies.
Family offices founded by high-achieving, perfectionist entrepreneurial leaders often desire not only to win through their primary business, but also their investment portfolios as well. Given this backdrop, asset allocation and fund manager selection were reported as the top 2 priorities among the family offices participating in the study. With this logic in mind, the ultra-wealthy often seek out expert strategic partners to help them with asset allocation and fund manager selection. In fact, the study reported half of family offices over $100 million outsource their manager selection and asset allocation.
If you are interested in partnering with Endowment Research Group for your family office, please do not hesitate to reach out to ERG Chief Investment Officer, Mark Bennett at mbennett@endowmentresearchgroup.com and/or President, Zafiris Vartis at zvartis@endowmentresearchgroup.com
