Family Capital: Women in Family Office Report

Women in Family Offices 2021 Report

DISCLAIMER

Women in Family Offices Report 2021

The information contained in this document is for information purposes only. It is not intended for and should not be distributed to, or relied upon by, members of the public. The information contained in this document, does not constitute and should not be construed as an offer of, invitation, inducement or proposal to make an offer for, recommendation to apply for or an opinion or guidance on a financial product, service and/or strategy. Whilst great care has been taken to ensure that the information contained in this document is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon. You may only reproduce, circulate and use this document (or any part of it) with the consent of Family Capital.

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The information contained in this document is for information purposes only. It is not intended for and should not be distributed to, or relied upon by, members of the public. Any research in this document has been procured and may have been acted on by Family Capital for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of Family Capital and no assurances are made as to their accuracy. This document is for information purposes only and does not constitute an offer or invitation to anyone to engage with Family Capital. © 2021 North Mews Publishing, trading as Family Capital. All other trademarks are those of their respective owners.

CONTENTS

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22

23

Foreword

Introduction

Executive Summary

Chapter 1 • Overview – The Current State of the Market

Chapter 2 • Governance

Chapter 3 • Investment

Chapter 4 • The Middle East

Chapter 5 • The Future

Summary

Women in Family Offices Report 2021

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3

Foreword

Women are increasingly significant generators, owners and investors of substantial wealth. A secular trend that is predicted to gather momentum. According to Forbes, 11% of their list of 2020 Billionaires are women, and The Centre for Economics and Business Research estimates that by 2025, 60% of the UK’s wealth will belong to women.

An important question is whether this increasing feminisation of the ownership and management of capital is translating across to greater gender diversity and inclusivity in the private wealth management industry and family offices. And if so, what is the impact across the industry?

To help understand better the trends and impact of the growing influence of women on governance of family offices, Guernsey Finance commissioned Family Capital to undertake research on this major issue. Given the importance of the Middle East to the private wealth industry we were also keen that the work looked specifically at the region. With their extensive network they have been able to reach a global representation of family offices and delivered an outstanding piece of research. We believe it provides real insight and we are pleased to share this with you in this report.

As a global finance centre with a strong tradition of providing specialist private wealth services, Guernsey has a proven track record in promoting good governance in corporate structures and family offices. I am also pleased to say that women are strongly represented at senior levels in our private wealth sector.

Guernsey professionals and firms are well placed to have meaningful conversations on the issues raised by this research, provide expert advice and support to establish family office services with good governance at their heart.

Women in Family Offices Report 2021

Marie McNeela Member of the Board Guernsey Finance

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5

Women in Family Offices Report 2021

Introduction

One of the biggest developments in the business and financial worlds in the last 20 years has been the growth of family offices. But, to a large extent, this development has gone mostly unnoticed.

Given many of these offices are run for the exclusive use of an individual and their family, they don’t tend to fit into the definition of a corporation. Family offices also want varying degrees of anonymity, given the desire to keep the family’s wealth away from the prying eye of the public and the media. For the most part, they aren’t subject to regulatory pressures to become more transparent.

Given a broader definition of a family office to include principal investment groups, and multi-family offices, Family Capital estimates there are at least 5,000 of these groups worldwide, with at least two-thirds of them based in the US and Europe. What is even more important than their absolute numbers is the rate at which they have grown in recent years.

It’s difficult to place a number on this rate, but at least half of the 5000-plus family offices in existence are likely to have been set up in the last 20 years.

Given the sheer number of family offices, it’s inevitable more is known about them. This, coupled with the increasing role they play in capital flows in public and private markets, means their profile has risen greatly in the last ten years.

As the knowledge about them has grown, their professional management has risen up the agenda. Issues like governance, which played a very small part in the past, are now more important for the sector.

Women in Family Offices Report 2021

These trends have corresponded with the corporate world coming under much greater scrutiny on gender diversity. Widespread scrutiny on gender diversity at board level and at senior management level is now mainstream in the corporate world.

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But until now, the role of women in the world of family offices has garnered very little attention beyond superficial analysis. This report attempts to change this, by looking at the state of the market and the issues of gender equality in the sector. It is also designed to shine a light on gender inequality in the sector, even to provide a call for action for widespread improvement. But, as with most things, it’s important to look at the issue with some nuance, especially for a sector which is itself so nuanced.

Executive Summary

Unsurprisingly, the family office sector across the board is still very male-orientated. Is it worse in this respect than the broader financial services sector? In some ways yes, in others no.

Women principals of family offices are few and far between, with fewer than would be expected given the rising number of women with substantial wealth as a ratio of the total. Women chief executives at family offices were also thin on the ground, but our research found senior investment specialists were more likely to be women in the sector than in the broader asset management world.

Most of the respondents felt formal quotas for greater gender diversity weren’t necessary for family offices. Most also felt greater gender diversity in the sector would improve within the next ten years, although more than a third believed it wouldn’t.

Governance structures – always a weak link for single-family offices – are likely to get more robust for family offices in the future, which should improve overall diversity within the sector. Given Multifamily offices, given their more commercial nature, and given anecdotal evidence tend to have better governance structures in place and better gender diversity, although the report didn’t look at this specifically.

Family Capital also looked at the Middle East family office world with respect to gender diversity.

Observations in this respect are somewhat clouded by the more informal family office structure in the region, compared with the US and Europe. Often women play a very important wealth management role in the Middle East which might not seem obvious to the outsider.

Broader studies also suggest women have greater control of assets than ever before in the region. That said, our respondents from the region suggest wealth management advice is still male dominated.

Succession decisions are, for the most part, the preserve of men, although sharia inheritance rules ensure women are likely to be on the boards of many family businesses, and to some extent, their ratios in this respect are better than in the West.

Women in Family Offices Report 2021

Gender diversity has moved up the corporate and financial services agenda significantly in the last 20 years. To provide a better benchmark of how the world of family offices has responded to gender diversity efforts, Family Capital spoke to more than 30 family offices across the world about their experiences in this respect. Family Capital was also able to draw upon its substantial database of more than 1,000 single-family/principal offices to reach a number of substantive observations of how the industry has responded to greater gender equality.

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Chapter

1

Overview – The Current State of the Market Women principals and senior management

principals, with only 3.5% of family offices employing a woman CEO. This compares with 7.5% of the Fortune 500 companies.

Men still control most of the world’s wealth through their family offices...

Although women with substantial wealth – earned directly, through a family business, or inherited are more common today – women principals (owners) of family offices are still very rare. Family Capital’s research from its database only found 4% of women are principals of family offices across the world. This compares with 11% of women who make up the Forbes 2020 list of Billionaires.

4%

Women in Family Offices Report 2021

of singlefamily offices principals are women

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compared with

11%

of the total billionaires

There are some notable examples of women principals who are pathfinders for future generations of women entrepreneurs and investors. They are: Oprah Winfrey’s OW Management; Serena Williams’ Serena Ventures; Dona Bertarelli’s Ledunfly, Corinne Vigreux’s Rinkelberg Capital, and Annie Chen’s RS Capital. ...and most family offices employ male CEOs Only 3.5% of family offices employed women CEOs. Women CEOs of family offices are even rarer than women

3.5% of singlefamily offices CEOs are women

compared with

7.5%

of the Fortune 500 companies

But women occupy more non-CEO senior roles, especially investment roles...

Women are playing a much bigger role in investment decisions within family offices, with 20% of our surveyed family offices having either a woman chief investment officer or as a senior investment specialist (director of investment, head of private equity, head of venture investing, senior asset manager).

20% 80%

of senior investment roles are women

Only 12% of family offices employ women in a senior legal role (general counsel, or other senior legal role. The percentage employed in a senior finance role (chief financial officer, or senior finance/ accounting role) was also only at 14%.

There isn’t much movement at the senior end of the family office market so it’s harder for people to come in and out of both the sector and roles within the sector. It’s difficult to know where to look for family office roles, they seem to pop up here and there but there is no one place to look.

There’s also the time needed to do the job. Many senior roles are advertised as 24/7 and that may put some women off who also have to manage a home and a family, and this will vary from office to office.

Senior woman manager at Swiss family office

The most important thing in a family office are relationships and trust. So it’s vital that the family have staff that they work well with and therefore perhaps there is a bias sometimes. My main family contact is a female who respects other strong females so perhaps that is important in my case. I do think men, particularly older ones, can underestimate what women can do and are capable of.

US senior woman manager

17%

17%

Other senior roles women were likely to be employed in family offices were head of real estate, head of external managers, head of social entrepreneurship, and head of communications.

I think for both men and women – to go into a Senior FO role, usually comes from one’s reputation in the sector – women especially require a referral to compete.

10%

Were in a legal position (General Counsel, other senior legal roles)

Were in an accountancy role (CFO, senior accountant role)

Were in other senior roles (such as the head of real estate, head of external managers, head of social entrepreneurs)

Women in Family Offices Report 2021

UK senior woman manager

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CASE STUDY

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A multi-family office perspective Charlotte Thorne Founding Partner Capital Generation Partners Capital Generation Partners, a multi-family office, is independently owned by the three founding partners – Khaled Said, Ian Barnard and Charlotte Thorne

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n the often publicity-shy world of family offices diversity and inclusion, if even considered an issue, is generally lagging behind that of the wider financial services industry.

It is, however, difficult to avoid the topic or be unaware of what is happening also on a broader societal level with many initiatives gaining attention globally. So how do family offices approach the topic and embrace potential change?

Charlotte Thorne, founding partner of London-based Capital Generation Partners (GenCap), a multi-family office, believes changes are happening but in subtle ways and often through hiring practices, particularly if there are already senior women within the company.

Women in Family Offices Report 2021

Subtle change

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Thorne explains that as one of the three founding partners at GenCap, the other two being men, she brought her own experiences to the mix and that naturally increased diversity not just in the issue of gender balance but also from the approach and thinking of having a different background and experiences than men.

“We have grown to 45 people and we are not far off a 50/50 gender split overall and among the six other partners, in addition to the founders, three out of six are women. This is by no means all my doing,” she emphasised.

Thorne added that much of the apparent gender balance is accidental as there has never been any special effort made to address gender imbalances within the firm – rather it has evolved organically.

Outside influence She also noted that a large proportion of clients tend now to be women-owned which has also been a trigger for more female advice sought, often perhaps subconsciously rather than directly.

“In addition, large numbers of the service providers to family offices such as lawyers, accountants and trustees are women which is often a first step into the world of family offices,” Thorne said.

The fact that more women are present at a pitch, which these days more often than not is happening over Zoom, can be an advantage, Thorne said.

“Instead of having the stereotypical six men in suits, having a different mix of people is often seen as a positive, especially if the owner is not the stereotypical white man. It can feel very disempowering to be talked at by 20-somethings in suits,” she added.

Thorne said the primary focus is trust and top-down engineering of gender, race, class, or any other imbalance is counterproductive. “Hiring a woman or anyone for the sake of it is not helpful in the longer term and will not bring about lasting change.”

Hiring a woman or anyone for the sake of it is not helpful in the longer term and will not bring about lasting change.

Diversity is important not only from equality and social perspectives. We believe that being active at a grass-roots level such as going into secondary schools and colleges and opening the doors through mentoring programmes is a better way forward.

Looking at different skill sets and backgrounds is more productive in bringing about diversity generally, she noted.

advantage in a fast-changing and evolving world,” she added.

No quotas

Thorne argues that true and long-term corporate and broader cultural change requires seeing value in difference and the unfamiliar. “This is why I am dubious about what has emerged as the diversity and inclusive industry, often led by men”, she said, comparing it with the phenomenon of “green-washing” within the ESG industry.

“Opening our doors, increasing social mobility and making students from underrepresented socio-economic and ethnic backgrounds aware of the fact that something such as a family office industry exists is a good start,” she said, adding that she herself fell into the industry by accident and did not know earlier in her life that such a sector existed.

While Thorne is doubtful of the usefulness of the diversity and inclusive industry as a whole, she does agree that having the topic widely discussed does bring the issues to light and could trigger change, as long as it is not legislated or forced by introducing quotas or other such measures.

Parental leave

“One of the biggest obstacles, in general, is that most people hire those who look or speak like themselves – that’s natural because we already feel a familiarity with those people. But that is where we have to push ourselves to accept others and sometimes it can feel challenging.

She said it is not helpful to women or broader diversity issues such as ethnicity, class or social mobility to engage in boxticking exercises or certifications where nothing actually changes. Using the example of parental leave, Thorne said one thing she would like to see is more men taking significant parental leave.

“Opening up conversations in new spheres is important. Of course that takes confidence which again is why we want to reach those that we would not naturally do via networking or our usual contacts. From a purely business perspective diversity of thinking and approach is a competitive

“Yes, it will affect your career – caring for children does come at a cost in time you can spend in the office. It has affected women’s careers for decades but women have had to make time for both. We need some trailblazing men to make this choice in order to make a permanent cultural change.”

Women in Family Offices Report 2021

“Diversity is important not only from equality and social perspectives. We believe that being active at a grass-roots level such as going into secondary schools and colleges and opening the doors through mentoring programmes is a better way forward.

Seeing value in difference

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Chapter

2

Governance

Governance sits uneasy at family offices...

Governance and its role within family offices is an area that has moved up the agenda for the sector in the last 10 years, having, for the most part, played little or no role in the past, particularly for singlefamily offices. With few external pressures on investment offices, at least single-family offices, and little internal need, enacting formal governance structures, apart from the most basic concepts, wasn’t viewed as important.

Better corporate governance period may be an overarching goal for most family offices…

80++20 80

80% of family offices have no gender diversity guidelines

Three-quarters of the respondents felt family offices need to do more to ensure gender diversity in senior roles.

Family offices were felt to be behind in the area of gender diversity compared with what is going on in the broader financial services sector. Family offices aren’t taking into account broader gender diversity efforts.

Senior manager at US family office

Given the low priority given to governance up until recently, the role of women in the governance process wasn’t even given a cursory glance by the owners, and not much more by management.

The ‘Women in Finance Charter’, which asks finance groups to commit to greater gender diversity, isn’t discussed at our firm at all.

Senior manager at a UK family office

Women in Family Offices Report 2021

...but thinking is changing

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But attitudes are changing, both from the perspective of the realization more needs to be done to improve governance structures and with the role of women within those governance structures. That said, it’s a slow process.

Our survey found that few family offices had any governance structures defining gender diversity, with 80% of those surveyed saying they have no gender diversity guidelines.

It’s a difficult issue to raise with the principal, given his priority is 100% around investment returns at the family office.

There is a perception, whether true or not, he will ignore any efforts to raise the issue of gender diversity at the family office.

Manager at a US family office

Gender Quotas Family offices aren’t going to enforce gender quotas...

Gender quotas at the level of the board of directors at listed businesses has become more accepted in the last 10 years. But there is still considerable debate on the issue.

In general, the debate is about whether gender quotas should be enforced at board level at listed businesses, or a softer advisory approach should be followed.

Recently, Germany has taken the step to make it mandatory for there to be 30% of women represented at the board level of listed businesses in the country. California, France, and Italy have moved to a similar mandatory approach, whereas the UK follows an advisory approach.

...instead, they will follow an advisory/ informal approach The issue of enforcing better gender diversity through the use of quotas was felt by the majority of respondents not to be necessary.

It should be part of a governance structure, but not central. We will employ the best person for the roles based on their expertise, not gender.

Senior manager US family office

Three-quarters of our respondents felt their family office was doing enough to ensure gender diversity in senior roles.

75++25 75

Gender equality is being pursued

Senior manager at a UK family office

75% believe their family office is pursuing gender equality

Women in Family Offices Report 2021

Whilst it is a stereotype; I think females can be more empathetic. They are generally more aligned with and have more patience for managing personalities and conflicts than their male counterparts do. This is an important part of working with large wealthy families across generations. I can say that the females in the family certainly appreciate having a woman on their board as they provide a different perspective. Indeed so do certain males within the family. Most importantly you have to earn your stripes like anyone else male or female. I think many can underestimate the skillset which can actually work to our advantage!

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CASE STUDY

2

Gender diversity and governance Rhian-Anwen Hamil Senior Business Coach working with family enterprises Rhian-Anwen Hamil is a senior business coach for family enterprises. In her previous role as a senior management recruitment specialist, Rhian worked with many family offices, including some with women principals.

O

ne of the few things we can celebrate in the last year is the state of women’s leadership. Whether in the world of politics with inspiring leaders like Jacinda Arden in New Zealand and Tsai Ing-wen in Taiwan, or in the world of business with professor Sarah Gilbert behind the Oxford/AstraZeneca vaccine and Jane Fraser now running Citigroup, women leaders appear to be as prominent as they ever have been.

But not so in the world of family offices, or at least not as much as they should be, as this survey by Family Capital reveals.

Women in Family Offices Report 2021

Where women are known in the world of wealth the tendency is to point to examples like MacKenzie Scott, the recently-divorced wife of Jeff Bezos, Melinda Gates, and Princess Lamia Bint Majid Al Saud – via their philanthropic efforts, and not their money-making abilities. It’s the men they are married to who make the money - at least that’s the widely held perception of women with significant wealth.

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With a few notable exceptions, women are still not at the top in a big way in family enterprise – despite supposedly being places to benefit all members of the family. Instead, many women are often still engaged with discrete family efforts in philanthropy, impact, and sustainability.

Things are changing, but not fast enough.

The way for more women to succeed is to take their traditional areas of concern and expertise – impact and philanthropy - and place them bang slap in the middle of how assets and businesses for the family are managed.

The pandemic has sharpened our instinct for what really matters. And this should provide an excellent opportunity for women to step up to the mark in family offices and push forward the importance of issues like the environment and make them centre stage to investment decision making.

I would say that diversity at both the executive and non-executive level in a family office improves the governance no end.

These concerns are at the forefront of all our minds, but especially the next generation and women are well set to lead this conversation.

In large family offices where women are in positions of influence, they are able to create inclusive and collaborative conditions where each family member is able to have a voice and feels they can make a difference. As a result, the wider family is able to make its stamp on the issues of the day in a way which enhances its relevance and reputation.

I would say that diversity at both the executive and non-executive level in a family office improves the governance no end; good governance is as much about having a multiplicity of voice and perspective at the top when strategy and purpose are discussed as it is about professional expertise per se.

More and more women can ride this wave to the top, becoming “primus inter pares” among their family members. They can make sure family wealth is put to work in a way that is productive and what “matters”.

The respondents didn’t believe the lack of transparency at family offices, compared with listed corporations, was delaying greater gender equality. Although 27% of respondents did feel this was a hurdle for greater gender equality at family offices.

Gender Equality compared with Transparency and gender equality at family offices

27% felt there was a hurdle to greater gender equality

73%

felt there wasn’t

It is all relative — look at the percentage of women who are CEOs of Fortune 500 companies, board directors and MDs/general partners at mid market private equity firms. By comparison, many family entities like family offices would be viewed as ‘as diverse’ or ‘more diverse’.

Senior manager US family office

Charities/Foundations Unsurprisingly, almost all respondents felt charities/foundations had progressed more in promoting women than family offices.

90++10 90

Charities/foundations compared with family offices

90% felt charities/ foundations promoted women more than family offices

There are more women in non-profit roles in the broader industry and this is often the pool that families hire from…

Senior manager US family office

Women in Family Offices Report 2021

Lacking pressure isn’t delaying progress

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Chapter

3

Investment

Family offices perform better than the wider asset management sector...

Women principals and women investment roles

Given the main role of family offices are driven by investing, the role of women within the investment function is the biggest indication of the level of gender diversity in the sector. Our analysis suggests the family office sector performs better than the wider fund management sector when it comes to gender diversity in the investment function.

As gender diversity rises among the ranks of the very wealthy, inevitably more women will set up family offices.

But do they necessarily prefer to employ women in top investment roles more than men? Our respondents felt women of significant wealth would be more inclined to employ women in top investment specialists than men.

However, this sentiment was far from unanimous, as one respondent voiced.

Research from investment group Morningstar found that only 14% of fund managers globally were women at the end of 2019, which hasn’t changed since 2000.

Only 11% of US fund managers were women in 2019, down from 13.8% in 2000, the Chicago-based research firm found.

Family Capital’s research found 20% of a survey of 1000 family offices had a woman in a senior investment role (chief investment officer, director of investments, senior asset manager).

Women in Family Offices Report 2021

Family office investment roles and gender equality, compared with asset management

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20% 14%

Family office

Fund managers

I do not see why females would prefer female management or male management.

Family office senior manager in the Nordic region

Impact investing

The fast-growing area of impact investing across the investment sector has been particularly driven by family offices. Given the progressive nature of the investment concept it might be assumed that gender diversity would also be a priority at a family office, particularly those following a more impact investing agenda.

There is a lot of anecdotal evidence for this to be the case. Notable cases in point

are Emerson Collective, founded by Laurene Powell Jobs, which describes itself as a social change investment group, Ceniarth, founded by Diane Isenberg, Blue Haven Initiative, cofounded by Liesel Pritzker Simmons and her husband, Ian Simmons, and RS Group, founded by Annie Chen.

Unsurprisingly, respondents felt women make a very positive, or positive impact/influence when it comes to ESG considerations and impact investing.

Risk and investment performance

As some respondents were divided on whether women make a positive difference towards managing investment risk, with 30% saying they make a positive impact and 25% saying they make no difference at all.

Diverse groups make better decisions. So, having females or female leadership could contribute to outperformance.

Senior family office manager in the US

Risk is probably the single most important thing you need to manage in an operation, because there are so many moving parts.

Senior family office manager in the Nordic region

30% 25%

Positive

Makes no difference at all

Women in Family Offices Report 2021

Investment performance and risk – and women’s contribution: Mixed messages

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Chapter

4

The Middle East

A first glance won’t reveal the truth...

Family Capital also specifically looked at gender diversity within the Middle East family office sector, in particular, the Gulf region. And a number of observations about the sector in the Middle East are pertinent in respect to gender diversity.

Firstly, the evolution of a family office ecosystem in the region has been slow.

Many family businesses use holding company structures to manage excess capital, rather than set up family offices.

Secondly, family businesses in the region are still dominated by male senior management, given the prevalent cultural and societal norms in much of the region.

Women in Family Offices Report 2021

Thirdly, to get a truer picture of the role women play from an investment perspective is very difficult, as often they play a much bigger role then assumed at first glance, particularly from those looking from outside.

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Nevertheless, out of Family Capital’s database of 30 single-family office/family holding groups in the Middle East, only four had senior women managers. There were no family offices out of the 30 controlled by women in the region.

Nevertheless, women in the Middle East are becoming an important force in the management of assets, according to a recent study by the Boston Consulting Group. The study found women manage nearly $800 billion in assets, amounting to 13% of the region’s total wealth of approximately $6 trillion.

This is expected to increase to $1 trillion by 2023. Saudi Arabia is driving growth in the region, with assets under women’s management valued at nearly $225 billion.

UAE is the second market, with women’s wealth of just over $100 billion.

Changing Perceptions Perceptions of women offering advice on wealth and investing is also changing rapidly in the region. The survey found 65% of respondents in the Middle East believe the role of women in providing wealth advice is more acceptable than five years ago.

65++35 65

More acceptable for women to provide advice

65% believe the role of women in providing wealth advice is more acceptable

Wives of business owners often have a major say in where wealth is allocated. Now this say is beginning to lead to formal structures where women have a formal role within family offices in the region. Although there is still a long way to go.

Senior manager in a Dubai-based family office

It’s difficult to gauge whether women in the region would prefer advice from a woman or a man. And the respondents weren’t more inclined to prefer a woman to be advised by a woman.

Governance and Succession Planning Governance and succession planning in the Middle East has risen up the agenda for family businesses in recent years. Nevertheless studies from the big professional services groups suggest fewer than half of family businesses in the region have formal succession plans in place.

Another issue for succession in the region is that families tend to be big, allowing for the business owner to draw upon many potential candidates. But men continue to dominate the succession process in the region. Respondents said men in the Middle

East were still the dominant force when it comes to raising questions of governance and succession planning.

Until you see more women owning businesses in the region, male-oriented succession will continue to dominate the wealth sector there.

Beirut-based women wealth owner

That said, shariah inheritance laws do give women rights to inheritance and this has given women in the region more ownership of assets. This has led to many more women sitting on boards of directors at family businesses in the region, with some estimates saying women now comprise 30% of people on company boards.

Women in Family Offices Report 2021

Advice

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CASE STUDY

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Changing Landscape of the Middle East Lynn Zovighian Co-founder, Zovighian Partnership, a family-owned social investment group Lynn Zovighian co-founded with her father the Zovighian Partnership, a family-owned social investment platform. Lynn is based in Beirut, Lebanon and Riyad, Saudi Arabia.

W

omen by way of Islamic law are recipients of wealth – that is well defined. The formula is dependent on which Islamic tradition you are from, but it is formulaically less than men.

If we move away from the theological formula, the point is that women are receivers of wealth so the question becomes – what does that wealth look like? How is it managed? What is the woman’s relationship with that wealth, and what is the potential for decision-making, for innovation, and for impact?

Women in Family Offices Report 2021

Typically, women still inherit more illiquid assets than their male counterparts. A woman may inherit a piece of land, and/ or extremely expensive jewellery, and/or works of art. They might also inherit liquid

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Society is seeing the positive impact of having women being decision-makers and co-decision makers in how businesses need to be run and how wealth needs to be managed.

assets like cash. But will a woman receive an investment portfolio, or operating assets? Will she be a shareholder in incomegenerating businesses?

Those are the questions where I think there is a very strong divide between families in the region. Between those that have fundamentally integrated their woman members, not just as shareholders, but as co-decision making shareholders, and those that haven’t. We still see a fundamental difference between both.

Do we have great examples of family offices where women have a say from a governance perspective? Yes, we do. Quite a few in Saudi Arabia, some in the UAE, Kuwait, and Oman. But if I compare it to a woman’s male counterpart (her brother, cousin, uncle, etc), a woman doesn’t have the same financial literacy, she doesn’t have the same investment mindset, and the ability to be strategic and create a meaningful enough contribution to, for example, an investment committee of a family office.

So we are in this phase of capacity building culture. And this isn’t just a Middle East phenomenon, it’s across the world.

Of course, there have been significant changes in the region in the last 10 years, particularly in Saudi Arabia where I first

Society is seeing the positive impact of having women being decision-makers and co-decision makers in how businesses need to be run and how wealth needs to be managed.

But what I don’t see is a coming together of women in family offices/ enterprises in conversations involving greater involvement. I don’t really see an ecosystem or an industry-wide cascading effect in this respect.

If there is any change, I believe it’s more from a family perspective. So, a family embracing the importance of gender diversity is looking at their governance and taking a look at their investment committee protocols with this in mind. But these efforts are on a much more trusted private basis than on a more ecosystem-wide debate and discussion.

Is the wealth industry providing genderequitable or gender thoughtful advice, and products and services? I don’t think so.

Instead, women are gaining more influence because they are part of families that are creating space for those conversations.

Families that are thinking in that way are very proactive – they make sure their women members are protected if something goes wrong and ensure they have governance structures involved for greater gender equality.

The challenge is to convert these efforts by enlightened families into more of an ecosystem of industry-wide acceptance.

What is now important is to make that a culture, rather than just some high profile case studies.

Women in Family Offices Report 2021

came to in 2012. The chair of the Saudi Stock Exchange is a woman, the head of two of the country’s biggest banks are women-led – so changes are happening at the top.

Women are gaining more influence because they are part of families that are creating space for those conversations. Families that are thinking in that way are very proactive...

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Chapter

5

The Future

Although it is generally felt gender equality improves as time moves on, as greater acceptance of diversity throughout society improves with every generation, few things move in a linear direction.

Indeed, indications suggest things haven’t improved much for women in terms of board membership in the corporate world, as alluded to in Chapter Three.

That said, 62% of the respondents believed gender inequality within family offices will be fully dealt with in ten years time. Although more than a third of the respondents believed that gender inequality wouldn’t be fully dealt with within that time frame.

Gender inequality at family offices in ten years time

62%

compared with

38%

There will be more women principals of family offices as a total proportion of family offices. The current 4% of women principals at single-family offices will move more in line with the Forbes Billionaire gender ratio, which is more than 10% within the next five to ten years.

As the existing women-controlled family offices tend to concentrate more on social and impact investment efforts, it would be expected the adoption of these investment trends will happen with new family offices with women principals, even more than for new family offices set up by men.

Although dealing with gender inequality has risen up the corporate world’s agenda significantly in the last 20 years, gender diversity has to compete against the current emphasis on climate change and other diversity efforts. As one of the respondents said: “When it comes to issues around reform, most family offices are now more concerned with ESG and impact investment efforts, rather than their gender diversity agenda.”

Women in Family Offices Report 2021

believe gender equality will be fully dealt with in 10 years time

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There are a number of anecdotal observations that can be specifically made regarding gender diversity at family offices in the future: Single-family offices are unlikely to adopt gender quotas, despite wider pressure within the financial sector to do so. Given the unique structure of single-family offices, they will be under less pressure to introduce gender quotas.

When it comes to issues around reform, most family offices are now more concerned with ESG and impact investment efforts, rather than their gender diversity agenda

Summary

Women and the role they play in wealth creation and the management of wealth is more important than ever. In many ways, they are setting the agenda for the whole wealth industry, at least certainly more than they have in the past. But, as this report shows, their role within the family office world is still significantly unrepresented.

To redress the balance, formal quotas aren’t likely to be the way forward, given the informal nature of the sector and little appetite to do so among family offices. A more informal approach will be followed.

Women in Family Offices Report 2021

Family Capital hopes this report will shine a light on the issue of gender inequalities within family offices. If it leads to just one family office improving its gender balance then the report will serve its purpose. At the very least, it is hoped it will generate more discussion around the issues raised by the report - because the outcomes can only be positive for the success of family offices worldwide if gender diversity is taken more seriously.

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Women in Family Offices Report 2021

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Family Capital

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Family Capital is an online publishing and research company dedicated to the global family enterprise sector. We produce daily news, features, and data-related research on family offices, private investment offices, and family enterprises. This includes our annual top 750 Family Businesses in the World, which has become the industry standard for the size of family businesses.

We send out two newsletters a week to more than 10,000 subscribers. Family Capital also produces high-level research reports on family offices and the global family enterprise sector.

Guernsey Finance is a joint industry and government initiative established to promote Guernsey’s financial services sector internationally, under the brand WE ARE GUERNSEY. The agency conducts marketing, communications and business development on behalf of its members from Guernsey and overseas, with representatives also employed in our key markets globally.

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