The institutional family office faces a range of interests and priorities, including seeking superior returns for their investor base, often with an outsized exposure to alternative investments. It is estimated there are over 7,300 single family offices worldwide, responsible for over USD 6T. The average family office portfolio allocated over a third to private market investments: 12% to real estate, 2% to private debt and 21% to private equity (including funds and direct investments). [1]
The lack of defined investing timelines, attraction to higher growth higher return portfolios, and having expansive networks to develop club deals make family offices ideal private market investors.
In our experience at GPFS, we see family office clients approach private investment structuring in ways that mirror institutional investment firms. For example, incentives, such as carried interest, for family office employees are built into the investment vehicles.
Additional complexity such as carried interest or management of outside capital, within the private market portfolio, increase the demand placed on the family’s back office. With a broad range of demands, it is often the case the operational design is not fit for purpose to manage the specific nuances and private market reporting requirements.
Complexity is not the only operational challenge family offices face. The team’s bandwidth is also being tested. Families and their providers are finding outsourcing the administration of the private fund portfolio to a firm like GPFS is more efficient and effective.
GPFS can immediately add value to a family office by:
- Becoming the quarterback for investment vehicle data
- Coordinate with tax professionals to smooth out the tax reporting obligations
- Improve reporting transparency for the investors, both internal and external
- Increase timeliness and accuracy of capital distributions
- Provide exposure reporting to the private markets, including unfunded commitments
GPFS is an experienced specialist in bespoke private investment portfolio accounting and reporting. We perform a full suite of institutional back-office services that can be customized to fit the private fund portfolio within the Family Office. We service several large Family Offices and are incredibly passionate about this work. With GPFS focused on the administration of the vehicles, the investment team has more time to focus on generating returns.
If you are a family office or multi-family office, GPFS can help organize your data, create more reliable reporting, and allow the investment team to focus on strategy and generating investment returns.
