From Puck, September 6:
Zuck’s Money Man & Larry Page’s Larry PageThere is an aphorism in the rarefied world of family offices that industry insiders will often recite at their stuffy conferences in Napa or Half Moon Bay: If you know one family office, you know one family office. In other words, every ultra-high-net-worth family is unique, and the contours of the investment-and-lifestyle shops they build to manage their assets, their profiles, and their vacations, reflect these idiosyncrasies. Their remit can include everything from managing family meetings to advising on “intergenerational wealth transfers,” to tax hacks like Opportunity Zones, to managing serious kidnapping threats and obtaining second passports.
Sure, every one of these family office managers is a special snowflake, but the mechanics of running them, as some sources admit off-stage, are not all that different. Yes, some love to make investments and compete with V.C.s, seeing it as a way to maximize their returns without paying management fees; other offices acknowledge that they don’t have the expertise in web3 or carbon sequestration or whatever, and hire outside managers. Some build quasi-endowments with huge in-house staffing to manage all three prongs of typical family-office work—the investments, legal/accounting, and the premium concierge services—while others outsource elements of that labor to specialists who can serve as their C.I.O., C.F.O., box-seat acquirer or dog-walker.But there is more that unites these single-family shops than divides them. The average family office globally has about $800 million in assets—decamillionaires are better off staying at Goldman Private Wealth rather than paying millions of dollars in annual salaries. And while the family-office industry has been around since the days of John D. Rockefeller, it is now bigger than the $4 trillion hedge-fund industry and is catching up in sophistication. Family offices these days are engaging in shareholder activism campaigns, launching E.S.G. initiatives galore, even spinning out entities to manage external capital from other wealthy families who want to invest together.
And yet unlike hedge funds, there is practically zero regulation of these entities by the S.E.C., and, more often than not, practically zero scrutiny. Critics describe these family offices as almost a shadow financial system. That misses the mark in many ways—billionaires are typically more interested in capital preservation rather than capital accumulation—but yeah, they’ve got some power beyond moving the yachts and aircraft into position and herding butlers and horses at their estates. And when family offices start executing these tactical or strategic initiatives, the staffing can swell into the hundreds of employees.Given their secrecy-by-design, family offices are also a totally underexplored facet of how our economy, politics, and culture works these days. In recent months, I’ve reported on the inner workings of Elon Musk’s peculiar office, Excession, and Sergey Brin’s enormous Bayshore Global Management, revealing some of the characters and philosophies that guide their decision-making. Tech billionaires can be fairly cash-poor, but these are but a few of the family offices doing genuinely interesting work, alongside Redwood Pacific Management, a rare co-sibling shop that manages the assets of Anne and Susan Wojcicki; Laurene Powell Jobs’s Emerson Collective, of course, another fascination of mine; Ekahi Aloha, the Hawaiian-themed shop that manages Marc Benioff’s Time magazine ownership; Lawrence Investments, the entity that manages the lavish affairs and enormous loans of Larry Ellison, as well as his more pedestrian concerns, like Ellison’s purchase, then proposed teardown, and now looming sale of a $150 million property in Palm Beach....
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