World’s Rich Bullish On U.S. As Family Offices Open Outposts

Every day, about 10,000 Americans born between 1946 and 1964 reach retirement age. Many of them have built businesses, don’t have an heir to take over and want to sell, said Robert Elliott, vice chairman at Market Street Trust Co., a multi-family office established to manage the wealth of the Houghtons, founders of glassmaker Corning Inc.

The U.S. is “a good hunting ground, particularly with this generational shift,” Elliott said in an interview.

Colombia, Chile

“Some wealthy families from countries like Colombia, Chile and Belgium have even established single-family offices in the U.S. with the intent of accelerating their American direct investment activities,” said de Visscher.

More than 40 percent of the 330 members in the Family Office Exchange are buying at least one private company a year, said Sara Hamilton, founder of the Chicago-based group.

The deals are part of a larger trend among family offices to find investments themselves. The number of family offices seeking equity stakes or lending opportunities directly grew 45 percent this year at Axial, an online network that connects companies to capital, said Peter Lehrman, the New York-based firm’s CEO.

Like Minded

“We get at least one call a month from a family company that is ready to sell and wants to sell to another like-minded family instead of a private-equity firm,” said Hamilton, whose group is a network of private families around the world with an average of $450 million in investable assets.

The New York firm that’s been investing money for the German automotive family was in talks earlier this year to buy a family-owned business based in California, said the person familiar. The family is looking for public or private companies in the automobile, textile or luxury industries with enterprise values between $250 million and $300 million. The transaction fell through, the person said, because of the seller’s lack of speed in closing the deal.

“It doesn’t come without risks,” Aeterna’s McCloskey said of international investments. “It’s easier said than done.”