Family Office
Complexity, Investment Demands Drive Family Office Services - Citco

Family offices - apart from the very largest - struggle to carry out all their necessary tasks in-house, and a new service is being launched to fill the gap.
The rising complexity of family offices, their need for more professionalism and use of alternative assets is driving support services to aid them, Citco, which recently targeted the sector with a new offering, told this publication.
A few days ago Citco Institutional Services was launched by US-based Citco to serve family offices, outsourced chief investment offices and pension plans around the world. As part of the rollout, Nick Eisenlau was appointed as the head of institutional services to lead the development of the business.
“Once they [family offices] have reached a certain level of
complexity they tend to look more like professional investment
managers. They get to a point where in-house operations become
challenging and start to look for external providers,” Eisenlau
said in a call. There is need, for example, for fee transparency
and recalculation services, he said. Adding that the work
with family offices builds on the work Citco has done for years
with institutions.
There is now an extensive network of providers looking after
family offices in the US; Asia is less mature and Europe sits
somewhere in the middle.
“Europe is going to be a very large focus for us,” Eisenlau
continued.
With an estimated 8,000 to 10,000 family offices worldwide
(estimates can vary depending on sources), and growing demand for
private equity, capital, real estate and other illiquid assets to
generate returns, these entities need help in dealing with the
complexities involved. It is often too arduous to run such
investments, with their reporting requirements and due diligence,
in-house.
“We think this is going to be a critical component of our
offering,” said Eisenlau, who noted the amount of direct and
co-investment work that family offices undertake, along with
joint venture deals. “There’s a huge opportunity for the [family
office] market in general.”
The new Citco offering takes a great deal of the grunt-work away
from family offices so that these structures can focus on
building up, he said.
“The goal of this business is to look at single and multi-family
offices' organizations and pull down some of the complexity and
take some of the mid- and back-office operations off their plate.
It provides them with the operational infrastructure so they can
scale up.”