What is a multi-family office?
A partnership for comprehensive wealth management.
A family office is an institution that oversees the management of a family’s entire investment portfolio, together with related services such as legal support, structuring through foundations, holding companies, and other vehicles, tax advisory, accounting, philanthropy, and more.
A multi-family office follows the same concept but serves several individuals or families at the same time, typically allowing them to pool resources, improve efficiency, and reduce overall costs. These partnerships often span decades.
It is also worth noting that multi-family offices are generally designed for the wealthiest individuals and families. And one important distinction: a multi-family office is neither private banking nor an investment fund.
A multi-family office partnership makes sense for wealth starting in the hundreds of millions of Czech crowns
Typical partners are therefore individuals and families with existing or prospective wealth of at least several hundred million Czech crowns.
These are people who want to reduce the burden associated with managing their investment and non-investment assets and often need to address their structuring, legal protection, succession, and inheritance as well.
Unlike an investment fund, a multi-family office does not take custody of its partners’ assets. It oversees and coordinates their management. There is therefore no need to transfer assets or money into the multi-family office itself.
A multi-family office effectively reduces the costs of managing and operating the entire ecosystem
A multi-family office generally addresses not only the strategic allocation of a long-term investment portfolio across asset classes and geographies, but also generational continuity and legacy planning for future generations.
While each family retains its individual approach and ownership structure, the multi-family office ecosystem allows families to share resources and expertise in areas such as:
- private transactions,
- direct investments in private equity and venture capital,
- experience in financial and real estate markets,
- due diligence processes,
- various philanthropic projects,
- and, last but not least, the operating costs of the entire ecosystem.
A multi-family office therefore coordinates wealth management from A to Z as part of a long-term strategic partnership.
Private banking can rarely provide such a broad range of services and opportunities, both because of the nature of its business model and because of regulatory limitations.
Founding partners apply the same principles to their own wealth
The founders and management of a multi-family office should apply the same principles and processes to the management of their own wealth.
This means sharing a similar perspective with their partners and understanding their concerns. They typically focus exclusively on the wealthiest families, generally those with wealth of several hundred million Czech crowns or more.
Their activities should also be overseen by an independent committee composed of experts from different fields. This provides an additional layer of oversight and helps support sustainable long-term wealth management.
Here again, the contrast with private banking and various, often unregistered, financial advisers becomes apparent.
A portfolio with an investment horizon spanning decades
A multi-family office portfolio is usually a diversified combination of:
- global and Czech equities,
- bonds and cash,
- real estate and other tangible assets,
- precious metals, art, collectibles, and antiques,
- private equity (PE) and venture capital (VC),
- specialized hedge funds,
- thematic, Web3, ESG, and other alternative investments.
This should not be a portfolio characterized by frequent discretionary trading aimed primarily at outperforming a market index, often at the cost of greater volatility and risk.
On the contrary, these investments usually have a very long time horizon, measured in years or even decades.
The focus should be on a sophisticated yet unnecessarily complicated allocation across these investments. Their relationships and correlations matter, but the portfolio should not become so over-diversified that the individual investments ultimately behave in much the same way.
A consolidated view of the entire portfolio should also be a given, for example through an online portal, together with regular reporting.
The goal is to preserve wealth for future generations
The primary objective of the portfolio is typically to preserve invested wealth as safely as possible and protect its real value against inflation over the long term.
The management team should therefore consist of credible financial professionals with relevant experience and verifiable results. They should have a strong understanding of risk management and apply it appropriately across the portfolio.
Costs are lower compared to private banking
Total operating costs are generally lower than with other forms of wealth management.
A multi-family office is usually compensated to a significant extent based on the overall performance of the portfolio, creating long-term alignment between the office and its partners.
Investments are selected with cost efficiency in mind and, unlike in private banking, the multi-family office is not limited to a narrow range of often expensive proprietary products.
At the same time, costs are generally lower than those of operating a standalone single-family office, where expenses cannot be shared with other families.
This is partly due to the ability to aggregate investments and share costs, thereby achieving more favorable terms for individual partners.