Family offices are often seen as highly secretive – and most of them are. But a small number are very public indeed. True, they might not call themselves family offices, but if a single-family office is an organisation that manages the money of one very rich family, then they fit the bill. Also, these very public family offices offer some of the best examples of direct investing there is, a classic trait of family offices.
Indeed, in these times when secrecy is increasingly frowned upon, these very public family offices might be the future of the sector. Of course, many of the richest individuals and families in the world will still prefer discretion when it comes to their investments, but these five family offices provide a useful illustration of how families can manage their money in the 21st century – and be transparent.
Italy’s most famous business family, the Agnellis, might own the biggest stake in Fiat, but they also control an investment group called Exor. It manages the family’s stake in Fiat and also a host of stakes in other businesses, including property groups Cushman & Wakefield and Almacantar, football club Juventus, Italian financial group Banca Leonardo and publishing group The Economist.
The Agnelli family control more than 50% of Exor and family member John Elkann is chief executive and chairman of the group. Yes, much of the rest of Exor is listed on the Milan stock exchange as an investment company, but if you buy shares in the business, you’re buying shares in the Agnelli investment business – and that’s pretty close to a family office. One other thing, Exor is also the 24th biggest business in the world in terms of revenue, according to The Fortune Global 500 List 2014.
As a recent article in the Financial Times pointed out, despite his image as an entrepreneur Richard Branson’s Virgin Group resembles a “huge family office”. The chief executive of the group said in the article that Branson “is interested in the investment portfolio, but doesn’t run any of the businesses in it”.
These businesses include the airline Virgin Atlantic, various mobile companies that use the Virgin name, Virgin Active and Virgin Money. But, as many business analysts point out, Branson and his family make most of their money from fees it charges companies for letting them use the name. All those fees effectively go into the family office.
The world’s most famous investor Warren Buffett runs his investments through the investment house Berkshire Hathaway, a name almost as famous as its owner’s. Again, like Exor, part of Berkshire Hathaway is listed, but shares don’t come cheap – the company’s A shares sell for around $200,000.
Buffett is chairman and president of Berkshire and he’s keen that at least some of the business remains under family control. His second son Howard is likely to take over the chairmanship when his father eventually steps down. Like Elkann at Exor, Buffett takes an active role in managing the businesses Berkshire owns stakes in. And all these businesses add up to one of the biggest companies in the world – according to the Fortune 500, Berkshire is the 14th latest in terms of revenue.
Investor is the oldest “family office” on this list, dating back to 1916. It’s owned by one of Sweden’s best-known business families, the Wallenbergs. The investment group owns stakes in some of big brands, including AstraZeneca, Saab, Electrolux and SEB. It’s also publically listed, but the family own the majority of the voting rights.
Investment AB Kinnevik
Like Investor, Investment AB Kinnevik is run as an investment business and controlled by three families – so in some ways it’s a multi-family office. Cristina Stenbeck is chairman and one of the main family owners. Kinnevik owns stakes in some big media groups, telecoms and financial services – and it manages a portfolio worth billions.