A family successfully built a consumer products business over decades. As the father was looking to retire, the family met to decide if this might be a good time to sell the business. Private equity firms had approached the family numerous times over the years. Market conditions were fueling private equity transactions and valuation multiples were at the highest level in the last ten years.
After extensive discussions among the family and their advisors, they decided to put the business up for sale. Multiple offers were received. The family negotiated an agreement with a private equity firm and sold the business. The father and his children, who were active in the business, were now all retired. What next? The family realized that their wealth was now liquid and had to be managed differently to successfully pass on wealth to subsequent generations. They decided to establish a family office.
LGA works with families like this to establish an office that will succeed in managing wealth across generations. The approach to establishing a family office starts with an understanding of a family’s values and purpose. LGA advisors interview and work with family decision makers to identify and document the values and purposes of the family. This will include interviews of family members that will be “clients” of the office and key advisors to the family. We will understand where the family is currently and where they want to go.
Based on the interviews, we will identify the role a family office should play to best serve the family. We work with the family to determine the scope of services the office will provide that are aligned with family values. Once the design is agreed upon, LGA will assist in identifying the proper organizational structure and staffing needed to deliver these services.
A successful family office will be a focal point for addressing a broad range of topics for a family. This will include coordination of work from advisors on tax, legal, investment and other services. The office should also have a strong risk management perspective. The office should be flexible to address the evolving needs of a family that itself is changing. LGA can guide families through the multi-step process to establishing a successful family office.
