Family Office

An Asian Pacific Family Team Executing Globally

Major Domus is a boutique investment advisory multi family office specializing in macro-asset allocation and venture investment strategies. This includes junior M&A deals, private equity and direct property. The firm’s clients and partners include a niche of international business participants, and high net-worth families.

Major Domus is always seeking entrepreneurial families to partner with our Office for asset management and co-investment deals. Typically we partner with families’ private banks and provide fiduciary asset management over these assets, and then add other family business services as required.

We also regularly seek to take on seasoned fund managers and senior bankers wanting to enjoy the benefits of private family enterprise. Professionals can partner with our Office(s), join our regulatory licensed platform, and build a successful partnership under a brand that serves families as a true Head Of House financial steward.

The meaning of Major Domus

According to Amil, R. et al. (2008), the single family office model began in ancient Rome and then spread across Europe. The early model took the form of the administrator of a wealthy single family household, the major domus (head of the house), and was known as the major domo (head steward) during the Middle Ages.

As time went by, the ideology, structure, and functionality of the European private bank model continued to evolve and spread. According to Gray (2005), the first trust company was established in 1853 to help entrepreneurs execute financial transactions and manage their wealth. However the only trustees at the time were individuals. The idea of creating a financial institution to handle trust and banking functions was regarded as innovative and prescient. The preservation of wealth was still the mainstream function.

Families such as the Medici family in the 12th century and the Rothschilds in the 1700s and other family dynasties all had their ‘family offices’. These ‘old’ families were said to be the ancestors of today’s multi-family offices, as they offered services to other families besides their own in return for a fee. They also played a key role in the financing of infrastructure and in the Industrial Revolution, which marked the expansion of the role of the bank trust officer. Until then, the duties of a Single Family Office (SFO) had remained rather simple, and served solely one generation of family members, but as stated in Amil, R. et al. (2008), ‘the Industrial Revolution marked the beginning of the truly individualized and separate SFO, as ever increasing wealth levels signalled a need for wealth preservation across multiple generations.’

Major Domus or Mayor of the palace: official of the western European kingdoms of the 6th–8th century, whose status developed under the Merovingian Franks from that of an officer of the household to that of regent or viceroy. The Merovingian kings adopted the system by which great landowners of the Roman Empire had employed a major domus (mayor, or supervisor, of the household) to superintend the administration of numerous, often scattered, estates.

This is closely related to the major domo, who is a person who speaks, makes arrangements, or takes charge for another. Typically, the term refers to the highest (major) person of a household (domus / domicile) staff, a head servant who acts on behalf of the owner of a large or significant residence.

What is a Family Office?

Family offices are generally categorized as either a single-family office, multi-family office, or a virtual family office.

A single-family office (SFO) is created to serve a specific family group, with a general threshold, (generally speaking) of USD$100 million or more investable assets.

A multi-family office (MFO) is an organization that provides family office services to more than one family group. It provides similar services to that of a single-family office, but one advantage is that there is no need to set up a separate family office infrastructure. Thus, making the entry level to such an office substantially lower to be around the $25m to $50 million range. The benefit of reducing costs comes with other advantages such as, increasing investment resources, streamlining due diligence on co-investment deals, and aggregating use of other infrastructure such as tax, legal, audit and family services.

Exclusivity and confidentiality increases when compared to being a member of a ‘private bank family office’ given the small number of families underpinning the Office. In turn, an MFO can bring to surface independence issues and reduce potential conflict of interest between different stakeholders working together as private family enterprises.

Virtual family offices (VFO) have started to be offered at the USD$10m level and above. What is meant by ‘virtual’ is essentially a website-based network set up exclusively for the management, governance, and communication needs of family wealth. The family’s trust adviser serves as the relationship manager who will assemble teams of individual professionals to serve and meet specifically the needs of the family.

The evolution of the family office: Innovation underpins the evolution of the family office model. Virtual offices are now able to mirror some of the services traditionally held for Single family offices, while multi-family offices can accommodate the tailored goals of separate families using investment bank and technology providers to maximize cost reductions and administration.

Today’s lower cost entry level illustrates the fact that technology and provision of services are the mainstay of a family office offering, rather than a certain amount of financial assets. In addition, by sourcing the different services such as lawyers, CPAs, Banks, etc., the MFO (and VFO) can function much like an SFO but with added efficiency, since every profession that is involved is a specialist within his respective field, whether working inside or outside an actual physical stand-alone (FO) office.

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