Family Office Wealth Origin Series: Sports & Media
The family office vertical represents a highly diversified section of the private wealth landscape. Given the private nature of these groups, they often allocate capital with fewer restraints compared to their institutional counterparts. A prevalent pattern drawn from our research is the connection between the industry origin of wealth and the industries of investment interest. Throughout this narrative, we explore a specific cross-section of family office entities whose wealth was created in the sports and media sectors, offering high-level data and insight into this particular group.
Table of Contents
- Asset Class Interest Breakdown
- Regional Breakdown
- Assets Under Management Breakdown
- Past Transactions Based on Origin of Wealth
- Family Offices with an Origin of Wealth in Sports & Media
- Conclusion
Family Wealth Origin: Sports & Media
— Wendy Craft, Chief Operating Officer at the Florida-based Gonzalez Family Office
Asset Class Interest Breakdown
As the search for predictable rates of return intensifies amid volatile market conditions, family offices continue to focus on non-traditional asset classes such as private equity, direct investments, venture capital, and real estate — hoping to capitalize on their investments.
Percentage of Total Sports & Media Family Offices: Top 5 Asset Classes
As outlined above, the most popular asset class of this sample size family offices is private equity at 90%. Next are direct investments at 88%, venture capital at 72%, real estate at 70%, and long-only at 44%. Overall, asset allocation can be a key determinant for total return potential and risk characteristics. Given the structure of family offices, the private equity asset class provides attractive solutions to family offices with long-term time horizons and a high appetite for risk.
Regional Breakdown
As with the industry origin of wealth, geographic location often plays a significant role in the investment preferences of family offices. Research highlights correlations among the percentages of family offices allocating to certain sectors based on where they are domiciled. Here, you can see 83% of family offices with an origin of wealth in sports and media are based in North America, followed by Europe at 15%. The rest of the world makes up the remaining 2%.
Assets Under Management Breakdown
Family offices allocate significant capital in meaningful ways when a suitable opportunity presents itself. Below, we outline the assets under management (AUM) breakdown of family offices that have created their wealth in sports and media. The most prevalent are family offices with AUM between two billion and five billion, at 26%, followed by those with AUM between 50 and 100 million, at 21%.
Past Transactions
Over the past decade, we’ve seen family offices accumulate the assets and necessary skills to allocate capital directly into the private landscape. Currently, more than half of all family offices elect to invest directly to some degree. Here, we provide a direct investment breakdown of family offices that have an industry origin of wealth in sports and media compared to the total number of family offices allocating to that sector. As you can see, there is a clear tendency for family offices to invest capital in the industries in which they made their wealth, as 18% of all family offices investing in sports made their wealth in sports and media. Sectors that follow include media and entertainment at 11%, human services, at 8%, telecommunications at 8%, and technology at 7%.
Family Offices with an Origin of Wealth in Sports & Media
Conclusion
Family offices often prefer investing capital in verticals they understand — often in the industries that they created their personal wealth. This stems from a pure understanding of the space, as well as the industry connections they possess, which ultimately adds value to the allocation.
Roughly 3% of the family office market comprises family offices that created their wealth in the sports and media spaces. This subset of family offices represents more than $75 billion AUM across the globe, with the majority being domiciled in North America. Family offices that made their wealth in the sports and media industry invest progressively and directly, with over half reallocating towards the sports and media sector. Navigating the complex nuances of this highly capitalized pool of capital takes time and patience, but the more you understand, the more likely you are to peel off capital.
All data derived from the FINTRX family office data and research platform.
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The FINTRX family office data and research platform combines over half a million data points on 11,000+ family office professionals and 3,000+ unique family offices globally. Built with the asset-raising professional in mind, FINTRX features state-of-the-art data exploration and visualization tools, engineered to provide the most effective means of targeting family office LPs. The beauty of the above is that all the information our research team gathers is completely proprietary and solely offered by FINTRX. As family offices continue to diversify their investment allocations and advance the scale of their operations, the FINTRX data platform continuously strengthens alongside.
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Originally published at https://www.fintrx.com.
