Family Offices: The Emerging Force in Web3 Investment

In recent years, the popularity of family offices among high-net-worth individuals has continued to rise. According to relevant research, as of 2022, the number of institutions named "family office" in China has approached 10,000, with a year-on-year growth of over 100%. At the same time, institutions such as the Monetary Authority of Singapore have disclosed that by the end of 2023, the number of single-family offices registered in Singapore has exceeded 1,100, with more than 40% of the founders coming from mainland China and Hong Kong.

This trend has also brought about changes in asset allocation preferences. Multiple surveys indicate that the allocation ratio of digital assets among high-net-worth individuals and family offices is increasing, with some rising from less than 5% to over 10%, and there are plans for further increases.

Types of Family Offices

Family offices are exclusive management systems built around family wealth, mainly divided into the following types:

1. Single Family Office (SFO): Established by a single high-net-worth family, serving exclusively that family.

2. Multi-Family Office (MFO): Established by professional institutions to serve multiple families.

3. Virtual Family Office (VFO): A combination of outsourced professional services that forms a "lightweight" operational structure.

4. Overseas family office: Cross-border structure established through places like Hong Kong and Singapore.

Regardless of the type, the primary goal of family offices is to build a dedicated management system that can transcend cycles and adapt to intergenerational inheritance.

Core Functions of Family Offices

Family offices are typically built around the following core modules:

• Tax and Legal Structure Design
• Asset Allocation and Investment Management
• Family Governance and Inheritance Mechanism
• Daily administrative and operational support

The Fit Between Family Offices and Web3

Family offices are naturally aligned with Web3 investments, especially in RWA (Real World Assets) projects, for the following reasons:

1. Cross-border structural advantages: Family offices have the ability to penetrate multiple legal jurisdictions, making them suitable for handling the complex legal and tax issues of RWA projects.

2. Compliant Identity: Family offices can act as qualified investors and participate in various complex financial products and equity arrangements.

3. Investment rhythm alignment: Family offices are good at long-term strategies, adapting to the lifecycle of RWA assets.

4. Governance Capital: Family offices can deeply participate in project governance, not only providing funding but also taking on multiple roles.

5. Compliance-oriented: The prudent decision-making and high compliance requirements of family offices align with the development trend of Web3 projects.

Conclusion

The involvement of family offices has brought a mature governance framework and a capability system for long-termism to Web3. They not only provide funding and channels, but more importantly, they bring an investment philosophy that is adapted to long-term development.

However, family offices are not a one-size-fits-all solution; they have high requirements for capital scale, governance capabilities, and structural design. In the future, we will continue to explore how to establish a truly "usable" family office structure and which investors are best suited to adopt this approach.