The term “family office” is often muddled in today’s professional and investment communities. Many families hold investment assets through holding…

The term “family office” is often muddled in today’s professional and investment communities. Many families hold investment assets through holding companies, but do not add value through deployment of resources. Such holding companies are not family offices under the definition I use in this article.

At its core, the family office is an investment company in which the families’ capital constitutes substantially all of the investment assets, and the family invests resources to operate the company as a business.

But why would a family form one? Generating this inquiry is the overriding desire of the senior generation of a family to perpetuate (and combine) family and charitable aims with economic aims. It was out of this realization that the Family Office Framework was born.

The attached article is Part 1 of Demystifying the Family Office. Next Saturday, Part 2 turns to structuring the family office, the Lender case and what it means to operate as a business.

Originally published as “Family Office Basics” in Family Business, August 10, 2023.