Paul Carbone, co-founder and vice chairman of Pritzker Private Capital, and Steven Kaplan, the University of Chicago professor widely known for his work and research on private equity and venture capital, for years discussed what they considered to be a dearth of information about an influential group of investors.
While the private-equity and venture-capital markets have expanded in recent decades, so has the academic research and the number of courses focused on them. But Carbone and Kaplan noticed that the same can’t be said about family offices, the groups of professionals from various disciplines employed by a singular family.
“You've got an exciting, maturing private-equity market, but at the same time you've got a growing family-capital, family-office market that doesn't get the attention that either the private-equity market gets or, candidly, the attention that family business gets in the academic world in particular,” Carbone told Institutional Investor.
The number of family offices has more than doubled over the past 20 years; there are an estimated 10,000 single-family offices and 5,000 multifamily offices globally and they collectively manage nearly $6 trillion in assets.
It was “crystal clear that this was certainly a growing market, that it was underserved in certain respects, and that there was a real place for a major academic institution” and the University of Chicago was an obvious choice, Carbone explained.
This week, Carbone, Kaplan, John Heaton, another University of Chicago professor, and other members of a steering committee announced the university’s Family Office Initiative, a jump-start effort to improve education about family offices, the research focused on them, and a differentiated network of them.
Heaton will begin teaching a new MBA course — called “The Family Office” — this winter that will teach students about different roles family offices play, how they are structured, how they define goals for investment and distribution, effectively leading them, and other topics. Research about family offices will be used to help create additional courses in the future. And the university’s Booth School of Business plans to host an invite-only summit for about 200 family offices in May next year.
Similar courses exist but at a short list of institutions, including the International Institute for Management Development in Switzerland, Harvard Business School, and the Wharton School of the University of Pennsylvania. Other academic programs are more focused on family businesses, not explicitly the offices a family might establish to oversee investment management, estate and tax planning, personal accounting, and philanthropy.
“The boom in family offices across the world has highlighted a need for education and collaboration opportunities among principals and practitioners. True to our history, Booth is leading the way by investing resources in a comprehensive program to support the development of family offices, further extending our global reach in this untapped area,” Madhav Rajan, Booth dean and the George Pratt Shultz Professor of Accounting, said in a statement.
Family offices are collectively having a greater impact on the world of investing, and even business broadly, but those effects are relatively known and understood compared to others. The philanthropic power of the world’s wealthiest families is intriguing and under-researched, according to Carbone.
“Understanding a family's important role — through typically their family office and their various entities — in the philanthropic market, I think, is an under-researched aspect of family offices,” Carbone said.
