AdapData

Established 2015 Notes

Notes · III Independent review

Family offices, operating businesses and independent review

In short

A family office advisory engagement on artificial intelligence and automation differs from the same work for a fund. The horizon is longer, the reporting obligations are lighter, and the holdings are mixed: operating businesses, real assets, direct ventures and external managers. The useful work is therefore rarely a technology programme. It is a disinterested reading of a small number of decisions, conducted quietly, on which the family’s own people can then act.

Note

What does a family office adviser do in this field?

Three things, in most engagements. Examine a specific proposition the family has been offered, whether a direct venture, a platform or a manager who describes an advantage in technical terms. Assess where automation would genuinely improve an operating business the family already owns. And establish what evidence the office itself should be receiving from its holdings, in a form the principal can read without translation.

The work is advisory rather than executive. Family offices are ordinarily small, and the useful contribution is a clear reading and a defensible recommendation, not a team placed inside the office.

How does a family office differ from a fund as a client?

The differences that matter are practical. There is no exit date, so an improvement that pays back over five years is a legitimate proposition rather than a cost to the next owner. There is no investment committee in the institutional sense, so a recommendation must be legible to a principal rather than to a specialist audience. And reputation is personal, which changes the tolerance for public error.

One further difference recurs. A family office receives a great many propositions and has limited capacity to examine them. Much of the value of an outside adviser lies in disposing of the unsuitable ones quickly and with reasons, so that attention remains available for the few that merit it.

Where do artificial intelligence and automation actually apply?

Most often in the operating businesses and real assets, rather than in the investment function. A hotel or resort, a property portfolio, an agricultural holding or a manufacturing business each runs on repeated processes: booking and rate setting, maintenance scheduling, procurement, quotation, service records. These are the places where a defined change produces a measurable result.

Within the office itself the opportunities are narrower and largely concern preparation: assembling material for a decision, tracking commitments and obligations, and maintaining a reliable record of what was agreed with each manager. Modest, well-specified work of this kind is generally worth more than an ambitious programme.

How should a direct venture or platform be reviewed?

As an owner would review it rather than as an investor in a syndicate. That means establishing what the business actually does when the presentation is set aside, who its customers are, what they pay for, and which parts of the claimed advantage would remain if a key individual left or a supplier changed its terms.

For hotel and resort owners, this is delivered as the Owner’s Audit. The principle is the same across asset types: a disinterested account of what a business does, and of where its value truly lies.

How is discretion maintained?

By keeping engagements few and senior-led, by declining to name clients, and by producing findings in a form that does not circulate. We do not publish case studies, and we do not use client work as a reference. Where a family requires a report to be shown to a third party, the version prepared for that purpose is agreed in advance.

This is also why most of our work begins with an introduction. An adviser who solicits family offices is, by the nature of the activity, discussing one family with another.

Questions

What does a family office consultant do?
Provides independent advice on a defined question: a venture or platform under consideration, an operating business the family owns, or the evidence the office should receive from its holdings. The work is advisory, with the family’s own people acting on it.
What is the minimum wealth for a family office?
There is no legal minimum. The threshold is set by running cost, since a single-family office carries staff, premises and professional fees and is economic only where those are modest against the assets served. Below that point families commonly use a multi-family office or a small team with external advisers. Figures quoted in the industry vary widely and none is authoritative.
How does advising a family office differ from advising a fund?
The horizon is longer and there is no exit date, so slower payback is acceptable. Recommendations are made to a principal rather than an institutional committee, and reputation is personal, which lowers tolerance for public error.
Where is automation most useful to a family office?
Usually in the operating businesses and real assets rather than the investment function: booking and rate setting, maintenance scheduling, procurement, quotation and service records. Within the office, in preparing material and maintaining reliable records of commitments.
Can an adviser examine a venture the family has been offered?
Yes. An independent review establishes what the business does, who pays for it, and which parts of the claimed advantage survive the loss of a key person or a change in supplier terms. For hotel and resort owners it is delivered as the Owner’s Audit.
How is confidentiality handled?
Engagements are conducted in strict confidence, clients are not named, and no case studies are published. Where a report must be shown to a third party, the version prepared for that purpose is agreed in advance.
What is an artificial intelligence advisory?
An advisory engagement on where artificial intelligence and automation bear upon a specific decision, what their adoption would change, and what is required to operate them soundly afterwards. It is advice on a defined question rather than an implementation service.

Engagement

We act for family offices, usually introduced by a principal, a trusted adviser or a fellow owner. Every engagement is senior-led and conducted in strict confidence. We reply personally to every enquiry; write to [email protected].

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