Money Managers - France: ultra-high-net-worth investors

Goals

To determine the amount of money managed by private wealth management offices (offices serving ultra-high net worth investors) in France, to understand the potential of entering a new market

Early Findings

Family Offices (Private Wealth Management Firms)

  • Family offices in France offer institutional-quality wealth management services for ultra-high-net-worth investors, and often have legal, tax, compliance, philanthropy, and reporting expertise.
  • According to Ernst and Young, demand for these services has led to a 10-fold increase in the number of family offices.

Wealth Management and High Net Worth Investors

  • In a 2018 report, Ernst and Young (EY) predicted that global volume of net investible assets held by high-net-worth individuals (HNWI+), who have investible assets >$1MM, will increase from and estimated $55 trillion in 2016 to $70 trillion by 2021 (+$15 trillion).
  • EY also predicted that, by 2025, holistic wealth managers will have a 30% share of the market.
  • Changes in the global wealth management market are driven by client demands, shareholder expectations, regulations, and technological advancements.
  • The increase in net assets for HWNI+ in France is expected to increase by $250 billion between 2016 and 2021. We estimate that 1.6% of the global growth in HWNI+ assets ($250 billion/$15 trillion=1.6%) between 2016 and 2021, can be attributed to France.
  • We estimate the predicted value of net assets in France held by HWNI+ in 2021 would be $1.17 trillion, assuming that the share of the growth in assets held by HWNI+ in France (which we estimated at 1.6%) would approximate the share of the total assets held (estimated global market value of $70 trillion in 2021 * 1.6% of global market = $1.17 trillion).

The Evolving Wealth Management Model and Family Offices

  • Globally, diversified product specialists and independent wealth advisors manage the majority of the assets of HWNI+ households. Traditional wealth management firms, family offices, and boutique management firms have held the remainder of assets under management.
  • While exact numbers are not available, holistic asset management firms are predicted to hold between $10 trillion and $15 trillion assets under management, accounting for the majority share (30%) of global HWNI+ assets under management.
  • This 2018 report also indicates that family offices hold roughly $5 trillion of assets under management globally, which we estimate to be approximately $80 billion in assets under management in France (1.6% of $5 trillion).
  • As of July 2019, according to Camden research, there were 7300 family offices worldwide, with 2300 in Europe. This firm estimated assets under management for family offices globally to stand at $5.9 trillion in 2019, which aligns quite well with the 2018 EY estimate of $5 trillion. Assuming France accounts for 1.6% of the family office market, we estimate assets under management to be approximately $94.4 billion in France as of 2019.
  • The trend toward increasing family offices is expected to continue due to a desire to preserve multi-generational wealth and an increase in Ultra-High-Net-Worth investors.
  • Director of Research at Camden Research, Dr. Rebecca Gooch, made the following comment about family offices, "From preparing the next generation for succession, to organising philanthropic initiatives, family counselling, concierge services, and trust/estate planning, family offices are as unique and complex as the families themselves. In turn, the benefits of owning one are limited in scope for some, and expansive for others."

Summary of Our Early Findings Relevant To The Goals

  • We were able to uncover two reputable sources of research, which indicated global assets under management for family offices at between $5 trillion (EY, 2018) and $5.9 trillion (Camden Research, 2019). Under an assumption that France accounts for 1.6% of these assets (based on their share of projected growth in the market between 2016 and 2012), we estimate assets under management for family offices in France to be between $80 billion and $94.4 billion.
  • Please note that resources are reflective of pre-COVID-19 changes in wealth.
  • Our recommended next steps are below.

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