London, global center of Family Offices
The British capital has the highest concentration of Family Offices in Europe, a booming business sector that manages high-net-worth families’ wealth.
London is the Europe’s financial capital, headquarters of numerous businesses that move and attract extraordinary investments. Amongst its most vigorous businesses, is where Family Offices (FO) are found. They are companies that manage the high purchasing powered families or group of families’ properties, assets, and investments.
It is estimated that there are between 1.000 and 1.800 of these Family Offices established in the United Kingdom. This is more than double the number at the start of the 2008 crisis, where there was around 400, and they are dealing with a capital of around E787m. In this period the number of Family offices has increased globally up to 40%, with the calculation that there are over 10.000 FOs.
Said businesses are not under as much pressure as banks or hedge funds from tax authorities, despite the high amount of assets that they manage. These businesses are created in diverse forms, depending on the families that hire or create them, as they adapt to their specific financial needs. In fact, for the Family Offices that only manage a single family, it is unlikely to be asked to register at Financial Conduct Authority, the British finance regulator.
Families that require FO services, tend to possess assets that range between 100 and 200 million dollars (around 92 and 184 million euros) although the average managed assets have been estimated to be around 662 million dollars (more than 608 million euros),
Besides, it is calculated that only 44.900 people in the world have such wealth and barely 4.500 possess more than a 500-million-dollar fortune (around 460 million euros).
So why has London turned into the main claim for these businesses? Primarily, the British capital has a leading luxury and financial industry, along with its associated services in Europe.
Furthermore, it offers a safe-haven for big investments with better guarantees than other competitor funds from Russia, China or the Middle East.
Lastly, it offers a more favorable regulatory and financial framework, above many, including that of New York, in the United States.
Around this industry has being developed a banking, financial, legal, real estate, and consultancy services market composed of highly-qualified professionals that satisfy all the HWNI’s (High-Net-Worth Individuals) management needs.
There has been development around this industry in banking, financial, legal, real estate and consultancy services market, composed of highly-qualified professionals that satisfy all the HWNI’s (High-Net-Worth individuals) management needs.
To conclude, the Family Offices’ impact in the economy is higher compared in terms of job creation, investments and taxes.
The good health of this industry is one of London’s objectives if it does not want to lose its worldwide influence as a financial hub, and one of its main keys for an out-of-the-EU United Kingdom’s future.
Del Canto Chambers’ Editorial Board