What is a family office? Definition, how it works and examples
A private investment firm with one client — how single- and multi-family offices are structured, how they are regulated in the US, and how they reach private companies.
The short answer
A family office is a private company that manages the wealth of one family — its investments, and often its taxes, accounts, legal affairs and philanthropy — and the best-documented family office examples, such as Soros Fund Management after 2011, show it working as an in-house investment firm whose only clients are members of that family. For a private company raising money, a family office is a direct investor that answers to no outside clients and no fund timetable.
What is a family office, and how does it work?
What is a family office in finance? Structurally, a company — often an LLC — owned by the family, staffed by employees, and run for one purpose: to manage the family’s money as an institution would, without paying an institution to do it. The person whose wealth it serves is the principal; the family members, trusts, foundations and holding companies it serves are its clients. What is a family office in wealth management, as against a private bank or an adviser? The difference is who works for whom.
Single-family office vs multi-family office
Family office examples and the SEC rule that defines them
In the US, a family office is defined by Rule 202(a)(11)(G)-1 under the Investment Advisers Act, adopted in June 2011 as the Dodd-Frank Act was bringing hedge fund managers into SEC registration. A family office that meets the rule “shall not be considered to be an investment adviser” — so it does not register with the SEC or file Form ADV. Three conditions, all required: Only family clients Family members, former family members, key employees, and the trusts, estates, charities and companies they own.
What is family office investing, and how do family offices invest in private companies?
What is a family office in investing, compared with a fund? A fund has outside investors, a fixed life and a mandate it cannot leave. A family office has none of the three: it can hold a company for decades, write a cheque without a committee of limited partners, and change strategy when the family does. That patience is what a family office can offer a founder and a fund cannot. Family office investment in private companies takes four forms.
Family office cost: what it takes to run one
Most of the cost of a family office is fixed: people, systems, audit and legal work cost roughly the same whether the office manages $200 million or $2 billion. So the cost as a share of assets falls as the family’s wealth rises, and the question is always the same — at what size does building one beat buying the service from a multi-family office or a private bank? Common mistakes Taking an outside client Even one unrelated client can take the office outside the exclusion and into adviser registration.
The terms this page uses
Family office A company owned by one family that manages that family’s wealth. In the US, excluded from the Advisers Act if it meets the SEC’s rule. Single-family office A family office serving one family only — the form the SEC exclusion covers. Multi-family office A firm serving several unrelated families, usually regulated as an investment adviser. Principal The person, or generation, whose wealth the family office was set up to manage. Family client Under the SEC rule: family members, former family members, key employees, and their trusts, estates, charities and companies.
What people ask about family offices
What is a family office, in simple terms? It is a private company a wealthy family owns to manage its own money and affairs — investments, accounts, taxes, legal work and philanthropy — with its own staff, instead of relying on banks and advisers. What are some family office examples? Soros Fund Management became a family office in 2011, returning about $1 billion of outside money so it could serve only the Soros family. MSD Partners, which invested for Michael Dell and his family, went the other way: it took outside capital and is now part of SEC-registered BDT & MSD Partners.
What is a family office, in simple terms?
It is a private company a wealthy family owns to manage its own money and affairs — investments, accounts, taxes, legal work and philanthropy — with its own staff, instead of relying on banks and advisers.
What are some family office examples?
Soros Fund Management became a family office in 2011, returning about $1 billion of outside money so it could serve only the Soros family. MSD Partners, which invested for Michael Dell and his family, went the other way: it took outside capital and is now part of SEC-registered BDT & MSD Partners.
Do family offices have to register with the SEC?
Not if they meet Rule 202(a)(11)(G)-1: only family clients, wholly owned and controlled by the family, and not holding out to the public as an adviser. A multi-family office does not meet the rule and is generally a registered investment adviser.
What is a family office investor looking for in a private company?
Usually a long holding period, a fair entry price and a seat close to the information. Without a fund’s fixed life, a family office can wait for a listing or a sale, which makes it a natural buyer of late-stage private shares.
How much wealth do you need for a family office?
There is no legal minimum. Because most costs are fixed, the question is when a dedicated team costs less than buying the same services — and that depends on what the family wants done in-house.
Where every figure on this page comes from
Rules and figures were last verified on 2 October 2026 against the current text in the eCFR. The rules described are US federal rules; other jurisdictions regulate family offices on their own terms. Examples are limited to firms whose status is documented in a source listed below.