Selling a business is often just the beginning of a whole new game.
After you exit, you're suddenly faced with a new challenge of managing significant wealth. This isn't just about picking some stocks or hiring random advisers. It is about designing an operating system to protect and grow your capital over decades.
That's where private investment offices come in. Think of them as a personal investment company – a structure that lets you run your money with the same focus and strategic thinking you applied to building your business.
In this guide, we'll explore how modern founders set up lean, tech-enabled family offices (even with under $300M in assets) to maintain control of their wealth. We'll cover everything from structure and strategy to operations and common pitfalls.
This is your playbook for turning entrepreneur mode into investor mode – without giving up agency over your hard-earned capital.
What Is a Private Investment Office?
Private investment offices are essentially scaled-down versions of traditional family offices. They are structures designed to manage wealth for high-net-worth individuals or families, focusing on investment activities.
The family office concept dates back to the 19th century when families like Morgan and Rockefeller created dedicated teams to manage their vast fortunes.
But today, you don't need billions to benefit from this approach.
Modern technology and service providers now make it possible to create a lean family office setup starting with as little as $30-50 million in assets. In fact, there's a growing recognition of what some call the "service desert" faced by successful founders:
- Traditional wealth managers offer cookie-cutter solutions that don't match your ambitions
- Big private banks focus on much larger clients (and often just sell products)
- DIY investing doesn't provide the structure or expertise needed for complex wealth
A private investment office fills this gap by providing a personalised, comprehensive approach to managing your capital with full control and flexibility.
Single vs. Multi-Family Offices
There's an important distinction here:
- Single-Family Office (SFO): Serves just one family or individual
- Multi-Family Office (MFO): A firm that serves multiple unrelated clients
A private investment office is typically a single-family office – it's your dedicated structure. Sometimes, the "digital" or "virtual" label simply means it's scaled appropriately for the wealth level and leverages technology and outsourcing rather than a large in-house staff.
Key Benefits of Private Investment Offices
Why do founders create these structures instead of just handing money to a private bank?
- Control and customisation: You set the strategy aligned with your goals and values
- Holistic planning: Integrating investments with tax, estate, and philanthropic planning
- Deal access: Ability to source and participate in private deals that traditional managers can't offer
- Privacy: You keep financial matters in-house
- Flexibility: No bureaucratic mandates or cookie-cutter approaches
Most importantly, a private investment office lets you remain actively involved in the investment process. Many entrepreneurs enjoy the challenge of investing and want to apply their business skills to grow their wealth.
Remember: Once you've created wealth, managing it becomes a whole different game. The private investment office is your vehicle to professionalise that.
Structure and Governance: Run Your Wealth Like a Business
Setting up a private investment office means treating your wealth like a business, with a clear structure, governance, and operational systems.
Entity and Legal Structure
First, you'll need the right legal setup. Common structures include:
- LLC (most popular in the US)
- Family Investment Company (FIC) (common in the UK)
- S-corporations or C-corporations (less common)
Many offices use multiple entities. For example, one entity (OpsCo) might employ staff and handle operations, while separate entities hold various investments for liability protection or tax efficiency.
The choice of jurisdiction matters too. Some families incorporate in tax-friendly or privacy-focused locations like Delaware, Wyoming, Singapore, or Dubai's DIFC. The UAE, in particular, has been attracting family offices with favourable tax policies and updated regulations that make the setup easier.
Read our Family Office Location Guide for more information about different jurisdictions.
Bottom line: Consult with qualified legal and tax advisors on an optimal structure that balances tax efficiency, compliance, asset protection, and admin simplicity.
Governance and Roles
Good governance is essential for building a robust private investment office. Start by defining the mission and scope:
- What are your primary objectives? (capital growth, income, preservation, impact, etc.)
- What level of risk tolerance makes sense for your situation?
- How will decisions be made?
Clear processes prevent impulsive or emotional decisions even in a one-person office. Consider creating an investment policy statement that documents your philosophy and guidelines.
Clearly delineate roles if others are involved (spouse, children, friends). Who has the authority to make which decisions? What thresholds require consultation? Some founders set up an investment committee or advisory board of trusted experts who periodically review strategy.
As one best-practice guide puts it: "Your family office structure should include a mission, advisory boards or meetings, and documented processes for decision-making and information sharing."
Lean Team vs. Outsourcing
A digital family office typically keeps staffing lean. Many start with no full-time staff beyond the principal. Instead, they rely on external advisors (lawyers, CPAs, investment consultants) and perhaps a part-time bookkeeper or executive assistant.
As complexity grows, you might hire one or two key people:
- A CFO/financial controller to handle accounting, reporting and cash management
- An investment specialist to help manage investments and/or evaluate deals
- A generalist "family office CEO" to run day-to-day operations
However, hiring full-time staff is expensive and can cost $1.5m-$2m to run operations with even a few full-time staff. That's why outsourcing is common for non-core functions. Many family offices outsource tax, accounting, legal work, and investment management for certain asset classes.
The virtual family office concept means you have a virtual team of best-in-class experts on call, coordinated by a central person (who might be you or an external advisor).
Risk Management and Controls
Corporate governance principles apply here as well. Implement internal controls for handling money, for example:
- Dual signatories for large transfers
- Regular reconciliations of accounts
- Strong cybersecurity practices
- Adequate insurance (umbrella liability, D&O insurance if applicable)
Family offices can be targets for cybercrime or fraud, so don't skimp on security measures. A 2024 survey from Deloitte revealed that cybersecurity is a top concern for family offices globally. Over 43% of family offices worldwide experienced a cyberattack in the past two years, with half suffering multiple breaches. While many family offices have been impacted, only a small percentage feel they are "very well protected".
Regularly assess different types of risk – investment risk, operational risk, and regulatory risk – and have contingency plans. What happens if you're incapacitated? Who can step in to manage the assets? Some families draft a "family continuity plan" to address this matter early.
Setting Up the Family Office: Step-by-Step Guide
Let's break down the process of establishing a private investment office:
1. Clarify Your Goals and Scope
Start with the "why" – what do you want your family office to achieve?
- Are you focused on preserving wealth for future generations?
- Do you want to actively grow capital through direct investments?
- Is philanthropy a major component?
- How important are non-investment services like property management?
For many ex-founders, the goal is a balanced approach: preserve and grow wealth while staying involved through direct investments. Also consider your family situation—if you have children, the office's purpose might include educating the next generation.
2. Choose the Right Structure and Jurisdiction
Engage legal counsel to form the appropriate entity (or entities). Consider:
- Tax efficiency (both income and estate/inheritance tax)
- Asset protection
- Administrative complexity
- Regulatory requirements
Make sure you understand the structure and feel comfortable with its complexity. Remember regulatory definitions, too – in the US, a single-family office can be exempt from registering as an investment advisor (as long as you only manage your family's funds).
3. Establish Governance and Policies
Before making investments, develop your Investment Policy Statement that codifies:
- Risk tolerance
- Target asset allocation
- Liquidity needs
- Any constraints (ethical restrictions, concentration limits, etc.)
- Decision-making processes
Also, outline operational policies—how often you will review performance reports, who can move funds, etc. These foundations may seem tedious, but they prevent ad hoc chaos later.
4. Build Your Team (People and Advisors)
Decide which functions you need in-house versus outsourced. Early on, you might mainly rely on external advisors:
- A private banker or broker for executing trades
- An attorney for legal work
- An accountant for taxes
If your volume of activity grows over time, you may hire dedicated staff. Always check references and ensure absolute trustworthiness—beyond technical skill, integrity is paramount in anyone handling your personal financial affairs.
5. Set Up Infrastructure and Accounts
With structure and people in place, the necessary bank and brokerage accounts can be opened, assets can be transferred into the new entities, and any needed credit lines can be established.
Many family offices maintain relationships with multiple banks in different countries to diversify their portfolios and access local deals. Make sure that signing authorities and online access are correctly configured.
6. Implement Technology and Reporting Systems
Early on, it might be tempting to manage everything in spreadsheets. This becomes inefficient as complexity grows. Consider implementing family office software solutions like Addepar, Masttro, or Asora.
These platforms can:
- Aggregate data from multiple accounts
- Track public and private investments
- Provide performance reporting
- Store documents securely
The goal is to replace clunky Excel with a modern dashboard of your entire net worth. When choosing software, consider features like multi-asset class support, security, and collaboration capabilities.
7. Develop an Investment Strategy and Asset Allocation
Now, for the core portfolio, decide how to invest your capital. Create a target asset allocation that meets your objectives and risk appetite. For example:
- 40% public markets portfolio (stocks/bonds)
- 20% real estate
- 20% private equity/venture
- 10% alternative strategies
- 10% cash reserves
Every family is different. Some entrepreneurs invest heavily in what they know (e.g., tech startup investing), whereas others prefer to diversify away from their industry.
Even if you can't hire a full time Chief Investment Officer (CIO), consider bringing someone on a fractional basis to help you create your asset allocation and monitor your portfolio.
Plan for liquidity. If you lock too much wealth in illiquid investments, you might miss opportunities or face cash crunches. Many family offices keep a reserve fund for unforeseen needs.
8. Launch and Continually Refine
After the initial deployment, your office will officially be running. From here on, it's about monitoring, managing, and adjusting.
Schedule regular check-ins:
- Monthly cash flow reviews
- Quarterly performance and strategy reviews
- Annual comprehensive assessments of goals vs. results
Be ready to adapt as the investment environment or your life circumstances change. Also, remain vigilant about costs—track how much running the office costs relative to the benefits and, most importantly, the investment returns it can generate.
Investment Strategies for Private Investment Offices
One major advantage of having a private investment office is the freedom to pursue a broader range of asset classes and strategies than a typical retail investor. Let's explore common investment approaches:
