If a holistic definition of wealth includes family ties, friends, skills, reputation, or even freedom, this note focuses on what Seneca, a Roman intellectual from the first century, called ‘riches.’
In a letter to his friend Lucilius, Seneca captured an important aspect of the human condition concerning wealth: ‘That which had made poverty a burden to us has made riches also a burden.’ And, more provocatively, ‘If you wish to have leisure for your mind, either be a poor man or resemble a poor man.’
Possessing and managing wealth comes with a significant responsibility. Capital represents power and influence. Its deployment – investments, political donations, philanthropy – defines its owner. Therefore, ‘owning’ is not only a privilege but also a challenging task that demands attention, care, and expertise.
This perspective holds true, regardless of how ‘wealth’ is definitionally scoped. The greater the wealth, the greater the power and influence, the greater the responsibility to use it, the burden that comes with it, and the risk of losing it.
Given these considerations, it is unsurprising that the concept of ‘non-possession’ is central to various religious philosophies, including Buddhism, Jainism, and certain branches of Christianity. If wealth is perceived as a distraction and a net negative experience, renunciating it offers a liberating way of life.
Outside of religion, some individuals see benefits in divesting assets as they age, when possessions become a burden. The Swedes, always looking for romantic appellations, call it ‘Death Cleaning.’
For most individuals, however, accumulating and managing wealth is an integral life objective pursued with the intimate conviction that wealth, net of the drawbacks associated with it, remains a deeply happy experience. After all, the entire capitalistic system relies on this instinctive goal.
For families who have experienced a substantial liquidity event or seek diversification from an operating family business, ‘owning’ is an activity that benefits from being institutionalized. To do so, they can establish a Global Family Office (GFO.)
There are around 8,000 GFOs worldwide, managing over $3 trillion in assets. The assets under GFO management are expected to rise to $5 trillion by 2030. According to a comprehensive 2024 report on GFOs by UBS, roughly half of these assets are held in traditional investments (cash, debt, and equity.) The other half is spread across alternative assets (e.g., private equity, hedge funds, real estate, etc.)
While GFOs vary in terms of investment style and purpose, what usually distinguishes them is their long-term focus. Thus, they tend to value sustainability from a strategic and operational perspective. Thematically, the leading investment priorities are AI, healthcare, and automation, according to UBS.
As active managers, GFOs have a special place in a world increasingly dominated by passive investing. In particular, their role as investors in IPOs (and pre-IPO placements) is set to grow both in absolute (total assets under management) and relative (versus other active managers) terms – often driven by direct or indirect connections with the original family business.
Wealth, however defined, has the extraordinary ability to sponsor wealth creation.
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