Venture Capital

New analysis reveals a key source of early stage startup funding, family offices, have boomed in the last decade

- August 23, 2023 3 MIN READ
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The growing wealth of the top end of town has seen an explosion in the creation of family offices over the last decade, according to new analysis. 

That boom is good news for anyone looking to work in the space, since it’s a lucrative role according to the KPMG Australian Family Office Compensation Benchmark Report 2023. 

The survey, produced by KPMG, together with Agreus  and The Table Club, offers a glimpse into remuneration in the male-dominated family offices sector. 

CEOs pocket between $396,000 and $500k a year with CFOs taking home $330-396k. But if you want the job, it helps to be a bloke – 92% of CEOs and 88% of family office personnel are male.

The survey founder that 40% of family offices are looking to hire staff in 2023 and 33% of family office professionals will look for a new role this year.  

A family office is typically set up for people with more than $10 million in assets as a multi-generational investment vehicle in recent years they’ve played a key role on the Australian startup investment scene, with early stage funding.

Notable examples include Grok Ventures, the family office of Atlassian billionaire Mike Cannon-Brookes, the Fairfax family’s Marinya Capital, Alex Waislitz’s Thorney Investment Group, and Alberts Impact Capital.

Nearly 6 in 10 (57%) of the offices were created in the last decade.

The KPMG survey found that while 60% of the family offices survey have an investment committee in place, only 44% have a succession plan.

KPMG’s Global Head of Family Business., Robyn Langford, said that single more than 50% having Assets Under Management of $1 million to $500 million, and 58% having formal governance procedures in place.

“Family offices are increasingly shaping themselves with a corporate-style structure reflected in  their approaches to investment, succession planning, governance – and recruitment,” she said.

They’re largely small, with fewer than 30% of family offices employing more than 10 people, with 50% staffed by five people or less, compared to the global average of 23%.

But the number of employees does not necessarily dictate the amount of financial capital under the office’s control. Australian respondents to the survey reported that 40%  were managing wealth on behalf of only one generation, 35% were managing wealth on behalf of two generations, 20% were working for three generations and 5% were working on behalf of  four or more generations. In the US, 18% manage wealth on behalf of four or more generations.  

Langsford said the family offices responding to the survey, the sector employs anywhere between 10,000 and 20,000 people in Australia, with that number doubling over the past decade. 

“There’s now a larger public understanding of what a family office does; one  can now describe themselves as working for a family office and not need to explain what that  means. Many family office employees have previous experience working with the family, either  as part of the existing family business or in splitting roles across the family business and an  embedded family office,” she said

“Loyalty is can important characteristic of family office employment and suggests that the evidence of extended tenure inside family firms follows on into their family  office environment.” 

The survey also highlights the growing importance of the concept of ‘how, where and when I work’ to all talent as a precursor to their engagement with family offices. So too is the  relationship of the employer to the individual’s own values and sense of social responsibility. 

“The rise in the influence of impact investment and belief in the importance of how capital is  utilised was a theme that ran through our survey of family offices in 2021, where 70% of  respondents had either invested in or were conscious of developing an investment strategy  around impact. It is a sentiment that is shared by many employees,” Langford said. 

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