Australian Family Offices Thrive Amid Decade-Long Boom

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How have Australia’s secretive family offices managed to quietly amass unprecedented wealth over the past decade, defying global economic challenges and reshaping the nation’s financial landscape?

In a land where economic prosperity meets discretion, Australia’s family offices have quietly thrived over the past decade, emerging as financial powerhouses in a nation that boasts the world’s fourth-richest citizens. 

Data from a comprehensive survey conducted by KPMG, The Table Club, and specialist recruiter Agreus unveils the hidden world of family offices Down Under, where staggering growth has been the order of the day.

Australia’s remarkable resilience against economic downturns, boasting an unprecedented recession-free streak, has paved the way for an unparalleled financial boom. 

A surprising revelation comes to light within this climate – a staggering 57% of the country’s family offices have been established within the past decade. 

Robyn Langsford, KPMG’s global head of family business, expressed her astonishment, stating, “That’s quite a high rate of growth and higher than I anticipated.”

From Rural Lands to High Finance: Diverse Sources of Wealth

The surge in wealth is not confined to any specific sector. 

The rural landscape, including land and cattle prices, has contributed to the prosperity. 

James Burkitt, the founder of the family office group The Table Club, points out, “There’s been a significant increase in wealth from a variety of sectors, even if you look at the rural sector and the price of land and cattle.” 

This wealth surge extends to businesses that were, until recently, flying under the radar but have now experienced liquidity events.

Australia’s remarkable economic journey is one for the record books. 

Until the COVID-19 pandemic struck, the country experienced an extraordinary period of growth without a single recession since World War II. 

UBS data reveals that Australians now claim the title of the fourth-richest citizens globally, constituting over 3% of the world’s millionaires.

The Flip Side: Economic Challenges Emerge

However, the paradise Down Under is not immune to economic challenges. 

In 2022, the number of Australian millionaires plummeted by approximately 20%, primarily due to escalating interest rates, volatile asset values, and currency depreciation.

Within this booming landscape, Australian family offices have taken centre stage. They employ a workforce estimated to range from 10,000 to 20,000 individuals. 

Remarkably, the CEOs of these offices are among the highest-paid in the world, earning between $396,000 and $500,000 on average. 

Robyn Langsford of KPMG notes, “They are prepared to pay for someone who is culturally aligned with them … and are prepared to pay a premium.”

However, despite their remarkable growth and financial prowess, Australian family offices lag significantly behind global peers in gender diversity. 

A staggering 92% of CEOs and 88% of staff within these offices are male, in stark contrast to the UK, where 63% of office CEOs are men. 

Langsford comments, “Business founders in Australia are still heavily skewed toward males.”

Recruitment Challenges and Privacy

As family offices continue to grow, recruitment challenges loom large. Over 30% of family office professionals surveyed plan to seek new roles in the coming year. 

This poses a dilemma, as these discreet entities are difficult to identify or contact. 

They are known for their extreme privacy, and recently, some have ventured into the public eye by creating public-facing websites.

One critical focus for these family offices is succession planning, with just over 40% of respondents having a plan. 

Families actively seek corporate structures that can facilitate a smoother wealth transition to the younger generation, ensuring their financial legacy endures.

Australia’s family offices have quietly thrived in the shadows, propelled by a unique economic journey. 

As they navigate the challenges of recruitment, gender diversity, and succession planning, their continued success remains an intriguing story of financial resilience and adaptability in the face of change.

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