Where’s the Money? The Rise of Private Family Offices

Where the Money? Private Family Offices

Wealthy families around the world are rapidly becoming a major force within venture and private equity investing in Media & Entertainment. 

Within the Media & Entertainment industry, investors and financiers are often referred to as, “The Money”.  This is an inside joke within a commercial culture that will do nearly anything not to spend their own money.

But times are changing. 

An increasing number of Media Execs are building wealth and taking investment management strategy into their own hands.  Media reports of celebrities, and their families, who have attained ultra-high net worth status establishing private, professional investment companies include the likes of Oprah Winfrey, Will Smith and Kim Kardashian.  Many of these family-owned asset managers control investment war-chests and invest directly into the Media & Entertainment industry, which they tend to know well.

Celebrity investors, however, are just the tip of the iceberg.  Media Execs across studios, distributors and producers have tended to enjoy highly lucrative careers, with many taking the next step by professionalising their wealth management and moving it “in-house”. 

One recent example is the founder of independent studio New Line Cinema, Robert Shaye.  Mr. Shaye recently established Lemoko Investments and hired senior wealth management professionals from groups like Goldman Sachs into key positions to help manage his family’s fortune.  Shaye, who turns 85 in March, led New Line Cinema through an all-stock acquisition by Turner Broadcasting System in 1994 that valued his family’s stake in the independent studio at over US$100 million.  Mr. Shaye shepherded a slate of franchise films through New Line Cinema (now owned by Warner Bros. Discovery), including The Nightmare on Elm Street, Rush Hour, Austin Powers and The Lord of the Rings.

robert shaye in 2019 media c-suite
Mr. Robert Shaye in 2019. Private Family Office: Lemoko Investments. Image credit: Allen J. Schaben/Los Angeles Times.

Mr. Shaye joins a growing cadre of wealthy families establishing professionally-run asset management companies and building their own private equity portfolios rather than investing exclusively through private equity funds. 

According to the comprehensive Global Wealth Report 2018, Credit Suisse estimates that there were 1.6 million adults globally with assets valued between US$10 and US$50 million in 2018.  Between 2018 and 2021, that number increased by over one million to reach 2.7 million adults, according to Credit Suisse.  Looking at the “ultra high net worth” or “UHNW” segment, there were 84,490 adults with wealth above US$100 million at the end of 2021 with 7,070 of those above US$500 million. 

There is a general trend among the wealthy across industries as a growing sector of the private capital markets, the Private Family Office, grows in significance. 

What is a Private Family Office?

A Private Family Office is a wealth management organisation managing the financial and investment affairs of a single, wealthy family.  Its traditional purpose is to preserve and grow the family’s wealth over generations.  Typically staffed by a team of investment professionals and other financial experts, Private Family Offices are dedicated, professional investors with often longer-term horizons and a higher tolerance for risk than traditional Venture Capital or Private Equity fund managers.  

According to the Financial Times’ journalist Lucy Warwick-Ching in an article published on October 20, 2017, the modern concept of the Private Family Office emerged in the 19th Century.  “In 1838, the family of financier and art collector JP Morgan founded the House of Morgan to manage the family assets, according to the EY Family Office guide.”  She wrote.  “In 1882, the Rockefellers founded their family office, which is still going, having expended to provide services to other families.  It now manages or advises on more than $16bn of assets.”  You can read the full FT article here.

Once the refuge of a select few, the number of these private investment managers have been increasing dramatically in recent years.

will smith in 2019 media c-suite
Will Smith in 2019. Private Family Office: Smith Family Circle. Image credit: Max Morse/TechCrunch.

This growth is driven by several factors including the increasing number of newly wealthy families, their desire for greater control over investment decisions and the need for bespoke financial services that are not typically available through traditional wealth management firms.  The actual number of Private Family Offices is difficult to estimate as many of them are unregistered, unregulated, have no need to publicise their investment activities and do not disclose their portfolio performance.

That said, Private Family Offices are well served by established banks, law firms, accountants and consulting companies.  These professional service providers maintain intelligence on just how large a segment of the private capital markets Private Family Offices are.

According to a 2019 report by UBS and Campden Wealth, Private Family Offices managed an estimated $5.9 trillion in assets in 2018, which represents a significant portion of total assets under management within the private capital markets.  The report also suggested that Private Family Offices are deploying more capital into private equity, real estate, and other alternative assets.

According to a recent Mordor Intelligence report, there were an estimated 7,300 Private Family Offices worldwide at the end of Q2 2019.  At that time, 42% (3,100) were based in North America; 32% (2,300) were based in Europe and 18% (1,300) were based in the Asia-Pacific region.  The remaining 600 Private Family Office were spread over South America, Africa and the Middle-East.

In the 2022 edition of the UBS Family Office Report, a sample survey of 221 Private Family Offices collectively managed wealth of US$493 billion with assets under management averaging US$2.23 billion each. 


Top 10 Largest Private Family Offices in 2022

RankNameTotal AssetsRegion
1Walton EnterprisesUS$224.5 billionNorth America
2Cascade InvestmentUS$170 billion North America
3Bezos Expeditions US$107 billionNorth America
4Mousse PartnersUS$89 billionNorth America
5Ballmer Group US$85 billionNorth America
6WaycrosseUS$65.2 billionNorth America
7FedesaUS$55 billionEurope
8The Woodbridge CompanyUS$53.9 billionNorth America
9Pontegradea Inversiones US$53.8 billionEurope
10Dubai HoldingUS$35 billionMiddle East
Source: Sovereign Wealth Fund Institute.

“Family offices invest directly where they have an edge, often as an extension of the beneficial owner’s business interests. Funds are typically used as a way of complementing these direct investments by spreading risk.” According to Josef Stadler, Executive Vice Chairman, UBS Global Wealth Management. 

In an article published on January 9, 2023 Bloomberg journalist Amanda Albright reported that, “Money managers for the ultra-wealthy are eschewing traditional private equity funds and betting directly on upstart companies.  That article, behind a paid firewall, can be found here.

Albright was citing a recent report by Dentons, the global law firm, which posits that Private Family Offices were increasing their direct investment activities with 63% already investing directly into private companies and 22% reporting an interest in doing so.  Dentons surveyed 188 Private Family Offices from 32 countries for their report.

For Media & Entertainment companies seeking capital, Private Family Offices offer a direct alternative to Venture Capital and Private Equity investors.  However, like celebrities, film producers and studio bosses, the decision-makers within Private Family Offices are shielded by several layers of gate-keepers. 

The growth in Private Family Offices has generated an industry of membership communities, curated lists and digital forums and a growing number of event organisers offering in-person and on-line venues for gathering prospective investment opportunities, intermediaries and Private Family Office members for networking and presentations.

The costs of attending many of these events, held in places like Miami, Monaco and Dubai is often considerable.  A number of conference organisers seem to rely on the lack of transparency within the world of Private Family Offices to solicit large sums of money from would-be portfolio companies for the chance to pitch to prospective investors who are simply not attending.  The more widely publicised of these may seem more ultra-high class circus than an actual venue for meeting ultra-high net investors.

So, how does one connect with a Private Family Office?

As with celebrities, film producers and studio bosses, its all about networking and building connections.  A well-articulated proposal presented by a credible professional intermediary goes a long-way.  Professional introducers, often fully-regulated as “placement agents” maintain detailed contact networks with direct access to decision-makers at Private Family Offices and know which ones would be interested in any given proposal.

As with most professional service providers, capital introducers and placement agents are not difficult to make contact with.  But they do come with a fee attached.

If that is not an option, or simply unpalatable, the skilled networker will find a path through lawyers, accountants or other entrepreneurs to find access to someone with access to an executive within a Private Family Office.  There are quite a few out there.  And getting to them, as a sincere opportunity that aligns the interests of all involved, is exactly how many of these families built their own wealth in the first place.

Private Family Offices looking for particular investment opportunities tend to make it known.  Professional advisers and capital introducers then keep an eye out for well-articulated proposals from their own networks which are typically open and accessible.

In addition, a number of groups track transactional data in the venture capital and private equity arena.  For example, Crunchbase published a list of Private Family Offices sorted by the number of start-up or early-stage investments they made.  See the article here.  Crunchbase also maintains a database of these investors, which you can find here.

The Sovereign Wealth Fund Institute also maintains a list of the 100 largest Private Family Offices, which you can find here.

Acquiring information and knowledge about Private Family Offices may be a good first step in building a contact network intended to access them.  And in those networks, between the investor and the investment opportunity, is where the money is.

3 Comments

  1. All the links worked for me. A lot of details here and I really appreciate the links to the data on different family offices. Would like to see more of this on types of investors that have a real interest in media companies.

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