On the Frontline: Family Offices and the lives of the super-rich

On the Frontline: Family Offices and the lives of the super-rich

Image: Inwardsmarine (Wikipedia Commons)

Luna Glucksberg  (Goldsmiths, University of London)


“So, I was based in Switzerland near Zurich, and as part of a single family office, you might come across the term family offices occasionally now […] You typically find that the wealthier families, billionaires, will often have a single family office as opposed to going with a multi-family office, which gives them more privacy and control.  So I was working as part of the single family office, organizing for the client properties, and yachts in Spain, USA, Switzerland, and came back to the UK about three years ago, and was working for an American family with a base here, managing their estates”

Sharon, Luxury Asset Manager, Hong Kong.

Do you know what a family office is? No? Neither did I, before starting to work on a project to find out how the very wealthy – also known as ‘the super-rich’  – influence and shape the most exclusive areas of London, from Chelsea to South Kensington, from Sloane Square to Mayfair, up to Hampstead and down to Cobham and Esher.  For almost two years now I have observed and interviewed residents of these areas, service providers, council officers, politicians and, in a few cases, the very rich themselves.

We are by now familiar with the work of Thomas Piketty, a French economist who managed the remarkable feat of rising to the top of the charts with a book on economic history: Capital in the Twenty First Century. There are many reasons that may have contributed to his success, not least the incredible array of data he managed to pull together and the accessibility of his style, but mainly I believe it is because of how he captured, and expressed in a comprehensible way, an issue that resonated strongly and intimately with the wider public.

He managed to show that yes, the impression that the rich are getting richer is correct: only we usually do not quite understand by how much. What is more, it has always been so, and the sixty or seventy years during the 20th century, up to the beginning of the 1980s, in which economic inequality decreased, at least in Europe and the US, were nothing but a blip, due mainly to wars and recessions, an anomaly in a much wider and clear trajectory of capital accumulating and concentrating at the top, faster and faster.

Family offices are what makes Piketty’s equation, the now famous r>g, work in practice. If r is the rate of return on capital, and g is the rate of economic growth, when r is greater than g and income from capital grows faster than income from labour, and those who own the most capital already grow wealthy much quicker than those who do not. Wealth, in other words, generates wealth and grows itself, almost. Income from labour does not have a chance to ever keep up or redress this unequal distribution. This is what is happening now, or at least what we are moving towards, and in a sense is not dissimilar from what writers such as Jane Austen described in the nineteenth century, when the only real ways to have wealth were to be born with it, or marry into it: patrimonial capitalism.

No-one seriously disputes this analysis, although there are of course some issues that could be better addressed in it, for example Piketty’s glaring disregard for gender.  And yet, no-one is exactly clear on how this happens in practice. One thing I know for sure is this: it is not by accident, and family offices are amongst the key players in the game. It takes a great deal of work to make sure that the huge capitals accumulated by elite individuals or families are retained, grown and passed down appropriately through the generations, rather than lost through inflation, taxation and bad investments. And that is even before we start talking about the risks of divorces and the in-laws – usually referred to as ‘outlaws’ – trying to get their hands on trusts funds and all sorts of other assets.

All this was explained to me over coffee by Sam, an energetic Australian who came to London to study, and ended up working as a consultant for some of the most elite family offices on the planet. We met in one of those exclusive clubs in Mayfair where you can only get in if you know a member and are dressed appropriately, where businessmen (the great majority are, indeed, men) meet supposedly to relax, or, more realistically, to talk about work away from their offices. There is a gym and a swimming pool, and even a fencing room. There is of course a restaurant and meeting rooms and even, if needed, accommodation if guests chose to stay overnight.

To begin with, he explains, there are single and multiple family offices. Single family offices, as it is obvious, work for just one family, while multiple ones work for more than one. It is only the very wealthy who chose to have a single family office, as they are very costly to maintain, of course, and sharing them makes a lot of sense financially. Family offices employ teams of financial and wealth advisors who advise and guide the families to new investment opportunities and look after the existing capital; lawyers who protect the family interests, sometimes PR people as well, and sometimes lifestyle managers as well, who run the multiple households these families hold in ways that are similar to that of hotel managers.

Some people sneer at the family offices that also run the lifestyles of their clients, despising it as “the dog walking stuff”. In actual fact, managing the lives of families who are spread around the globe, whose mobilities mean that they can just as easily chose to have dinner in Paris if they feel like it, even though they may be in New York that evening, is a challenging task, as it involves ensuring that these individuals can move smoothly between different locations without any stress or difficulty.

This means not simply having staff who can pack their clothes for them at no-notice, but ensuring that each of the various family homes has enough clothes and accessories, arranged in the same order based on the preferences of the family members, that upon waking they will know where to find their socks, whether they happen to be in Dubai, New York or London. It means someone ensuring that the yoga teacher their client likes is there in the morning, even if they have to have been put on a jet and flown out to wherever the client is, whether they want to do yoga or not, just in case.

And on top of these, of course, is the financial and legal work to ensure that capitals are not just enjoyed, but grown and consolidated. Family offices look at the world globally and ensure that their clients assets are arranged in such a way as to take full advantage of favourable tax regimes and environments as they arise, and move away if the situation changes. They make sure that the yachts are registered and fly under the right flags, that companies are registered in the right ways, that sound investment opportunities are constantly sought out to increase and consolidate capital. Their work is what makes Piketty’s equation true.

So far, family offices have been largely missed by the sociological gaze. With the current resurgence in interest in elites, and the framework that Piketty has provided us with, it is reasonable to hope that this will change, and that more research will be developed looking at the role of family offices in processes of capital accumulation. The fact that most people, not simply the general public but literally anyone who is not involved in elites research or wealth management, do not even know that family offices exist, let alone who they are and what they do, is remarkable, and strangely reminiscent of the Usual Suspects definition of the devil. His greatest trick was convincing humans that he did not exist at all…


Luna Glucksberg is a Research Associate at the Centre for Urban and Community Research at Goldsmiths, University of London.