No. 1 HSBC Private Wealth Solutions has grown partly by catering to Asia's newly rich. Last year, the region housed 3.3 million millionaires, according to Cap Gemini and Merrill Lynch, compared with Europe's 3.1 million.
Bernard Rennell, global head of HSBC Private Wealth Solutions, who's based in Hong Kong, says his group targets families with $500 million or more. Asia's new billionaires often come seeking help with succession plans, Rennell says. HSBC came up with a bespoke solution for an Asian tycoon who wanted to pass along a controlling stake in his company to his seven children without giving all of them a chance to meddle in the company's day-to-day workings.
The banks' family offices have gotten bigger partly by buying boutiques. Bank of Montreal bought the name and client assets of MyCFO Inc., founded by technology entrepreneur Jim Clark in 2002. Now called Harris MyCFO, it's No. 9 in the Bloomberg Markets ranking, with $18.3 billion. Atlantic Trust, No. 11 with $14.8 billion, is an amalgam of three wealth managers that Atlanta money-management company Invesco Ltd. put together from 2001 to 2004.
Kirk Bowman, a venture partner at Accel Partners, a venture-capital firm in Palo Alto, Calif., says he looked at the big investment banks before handing his fortune over to MyCFO.
"It's better to have someone who's investment-vehicle agnostic as opposed to someone who's got an unnatural incentive to put you in their product," Bowman, 45, says.
Unlike the big banks, Constellation is nimble enough to pounce on unique investments, Tramontano says. Recently, Abraham and other clients invested in a partnership that's buying apartment buildings across the U.S. The venture is projected to deliver a 7% cash flow yield, without the fees that come with doing such an investment through a fund. Abraham even got to meet the partnership's managers before committing his cash, he says. It's that kind of personal touch that makes family offices popular, Tramontano says. The strategy has certainly worked for Constellation. It has gone from zero to almost $4 billion in assets in just four years.