In December 2021, I sat on the STEP International Client SIG Spotlight Session 7 discussing the concept of the family office, what it is and what it looks like from a global direction of panelists, including the great Barbra Hauser, author of “Setting Up a Family Office.”
A consensus was reached that every family office is different as much as every family is different.
As an overview, family offices provide a broad spectrum of private wealth management services to one or a small number of ultra-high-net-worth families.
Besides financial services, which has become a core focus of many family offices, family offices also offer planning, charitable giving advice, concierge, and other comprehensive services. Typically, family offices are exclusively for family members and their trusts, foundations, charities, NGOs and investment vehicles.
It is said that the world’s first family office set up shop in the United States in the 19th century. And its sole purpose at the time was to manage the fortunes of corporate moguls such as JP Morgan and John D. Rockefeller.
I, however, would like to challenge this thought process and present the fact that the family office may have started on the African continent centuries before this. As we already know, Africa had prolific kingdoms that were managed by “monarchies,” which were essentially families who then grew their vast wealth and influence into vast empires, which can be described as the historical family businesses. Each monarchy had advisors and people working to ensure the kingdom worked for the benefit of the community and, more-so, for the ruling family. Thus, the family office has its heritage on the African continent, although a lot of research would need to be done to understand how these vast empires worked and were managed so intricately.
Fast forward to today: what we see globally is that the family office offering continues to evolve into elaborate and further-reaching intricacies. Family offices have gained real traction in the past two decades and have become a significant contender in the money management game. A lot more wealthy families are setting up these vehicles, and it has become a booming business within itself. Credit Suisse estimates that between 6,500 and 10,500 family offices exist internationally and research by Campden Wealth suggests family offices hold assets in excess of $4 trillion.
According to the report, there are about 3,204 billionaires in the world (an increase of 13.4 percent since 2020), boasting a wealth of more than $10 trillion (a rise of 5.7 percent). Of these Billionaires, Africa has 1.4 percent, which is 44 individuals with a net worth of over $99 billion. This is a significant amount of money under management if one takes the Wealth-X Billionaire Census 2021 report into consideration.
According to the AfrAsia Bank Africa Wealth Report, total individual wealth in Africa is expected to rise by 34 percent over the next 10 years, reaching $3.1 trillion by 2027. A report by academics Ihsaan Bassier and Ingrid Woolard suggests that South Africa has an estimated 182,000 dollar millionaires based on tax data. Furthermore, research by Knight Frank established that just under 4,400 individuals will join the league of UHNWIs in Africa between now and 2026, a growth rate of 33 percent, the fastest in the world after Asia. This may see a rise in family offices, albeit multiple family offices growing in the overall African market and servicing the needs of the wealthy.
With this in mind, how are the African qealthy creating and driving their family offices? Are they using their wealth to invest on the continent, or are they taking it offshore and investing in high return markets. For some years now, Africa has been attracting the attention of serious investors. And much of that attention is moving from the traditional primary industries that have dominated investor interest in the past to more consumer-led sectors as Africa’s wealth has risen. Africa has so much potential as a platform and investment with the ongoing global ESG (Environmental, Social, and (Corporate) Governance) surge and focuses on socially responsible investing.
Let’s take a glimpse into the Investment decisions and rise of the family offices in and from Africa… and what they’re investing in.
Oppenheimer Generations
The Oppenheimer family has a combined net worth of $8.2 billion, primarily made by selling their stake in De Beers in November 2011 for about $5 billion. As we already know, Asia has become a tremendous trading partner for Africa. At times outperforming the traditional western trading partners in Europe and the United States. In 2021, Oppenheimer Generations, the family office of Nicky Oppenheimer and his son Jonathan set up a Singapore unit to increase its Asia exposure and drive investments between the region and Africa.
The family fortune traces back to Ernst Oppenheimer, Nicky’s grandfather, who founded mining giant Anglo American in South Africa in 1917. The firm later took control of De Beers, where Nicky was chairman from 1998 to 2012.
In 2018, Oppenheimer Generations was set up, and the family office has been actively engaged with several commercial ventures and not-for-profit organisations.
During COVID-19, Nicky donated more than $110 million to South African small businesses. The family office has 31 employees spread across South Africa, the United Kingdom and the island of Jersey.
Heirs Holdings
The family investment group of one of Africa’s well-known entrepreneurs, Tony Elumelu, is a prominent investor in Africa. Heirs Holdings has shown a particular interest in a diverse portfolio, including power companies, oil and gas, financial services, healthcare, and real estate. Their appetite for investments typically are big and have included Nigerian-based Transcorp Power, United Bank for Africa, and Transcorp Hotels. Elumelu is also a notable philanthropist through his Foundation. Tony is one of Africa’s most prominent proponents of promoting entrepreneurship among the continent’s youth. His foundation has invested $100 million into this effort. This may be an indicator of where future investments that Heirs Holdings makes may go. This family office is based in Lagos, Nigeria, without subsidiaries abroad.
Man Capital
Founded in 2010, this London-based family office of Mohamed Mansour and Loutfy Mansour, who are the family owners of Mansour Group, a huge Egyptian conglomerate, has been investing in Africa since its inception. The most notable investments made include IHS Towers, one of Africa’s biggest mobile telecommunications infrastructure providers, based in Nigeria, and an education investment group called Educas, which has invested in schools in South Africa and Kenya. The Mansour group operates in more than 100 countries globally, employing about 60,000 people.
The company’s interests span the energy, automotive, consumer durables, finance, retail, construction, tourism, shipping, defense, information technology, investment and food sectors.
Dangote Family office
In a 24-minute-long interview posted on YouTube in January 2020 with David Rubenstein, Africa’s wealthiest man, Nigerian billionaire Aliko Dangote explained that he plans to expand “outside Africa.” While talking about his plans to invest outside Africa, he mentioned that his company at the time of the interview had a $4-billion revenue and plans to grow it to about $30 billion in two years. It is from this money that Dangote plans to invest outside Africa. Dangote established that he has an office in London and is working towards having a family office in New York, United States.
Although he mentioned that a significant percentage of that money would be invested outside of Africa, he did not state where, and he wasn’t specific about the percentage he would invest outside Africa. However, he said that 40 percent of the money would be used to continue investment in Africa. Dangote is no oddity among African billionaires. His company, Dangote Group, has 18 subsidiaries specialising in a range of sectors such as cement manufacturing, sugar refining, petrochemicals, and infrastructure. The diversification rationale, Dangote said, was to “preserve some of the family’s wealth” and avoid “issues of devaluation” that plague the Nigerian currency, the naira.
TY Danjuma Family Office
TY Danjuma Family Office is a privately-owned single-family office that manages the assets of Theophilus Yakubu Danjuma. Based in Surrey, England, the office invests in public market equity and fixed income portfolios, alternative investments, real estate, and direct private equity investments. The office has a taste for diversified investments and has been known to also invest in everything from art and movie production to industrial gases and pharmaceuticals. The Danjuma office manages the TY Global Conservative Fund, an open-ended USD mixed-asset fund incorporated in Singapore with a bias towards emerging markets.
Selous Family office
Tanzanian billionaire Rostam Aziz set up his family office in Dubai. The office manages an extensive property portfolio in the Middle East and private investments in energy and infrastructure across East Africa.
Aziz was previously the largest shareholder in Vodacom Tanzania. He sold his stake to Vodacom Group of South Africa in 2018 and 2019.
TenGen Family Office
The Lagos-based family office manages the private assets of Nigerian bankers Herbert Wigwe and Aigboje Aig-Imoukhuede – their wealth comes from the acquisition of Access Bank in 2002 and transforming it from a small local bank into a multinational financial services giant. Tengen invests in financial services, energy, real estate and art.
Eric Ellerine Trust (Pty) Limited
Founded in 2012 by South African furniture tycoon Eric Ellerine, the founder of Ellerine Holdings, one of South Africa’s largest furniture retailers. Eric Ellerine Trust is a South Africa-based investment holding operating out of Houghton, Johannesburg. It has three core areas of investment focus, namely: investments in the Johannesburg Stock Exchange, property investments and private equity investments. Its property portfolio includes stakes in properties such as Canal Walk (Cape Town), The Glen (in the south of Johannesburg), and the Fourways Crossing Centre (in Fourways, Johannesburg), as well as many other iconic buildings.
Singularity Investments
Singularity is a private investment office started by Sam Darwish. It focuses on investment opportunities in North America and Africa. Sam Darwish, who has Nigerian, Lebanese and U.S. citizenship, is the owner of Singularity Investments, a Lagos-based family office that focuses on tech investments. Singularity has backed companies like Paystack, Flutterwave, AsokoInsight and Smile Identity.
Darwish is the chairman and group CEO of IHS Towers, the largest mobile telecom infrastructure provider in Africa, Europe and the Middle East.
Steyn Family Office
Steyn Family Office is the family office of South African billionaire Douw Steyn, the founder of BGL Group, a UK-based insurance and financial services company. Steyn is also the owner of the popular Saxon Hotel in Johannesburg, and Steyn City, a luxury private estate sitting on a 900-hectare site between Fourways and Lanseria in Johannesburg.
Their website states, “Steyn Group is a global single-family office platform that specialises in private market investments. We provide infrastructure and capital to seed, support and scale emerging investment managers and operating businesses.” Steyn Family Office has investments and operating subsidiaries in the UK, United States and South Africa across a range of private market investment strategies, including real estate, private equity and venture capital.
PanAfrican Investment Co
One significant African investor is a private investment firm founded by Ronald Lauder of the family behind Estee Lauder and Richard Parsons, a prominent Afro-American who has held many top positions in the United States, including the chairmanship of Citigroup. PanAfrican has an impact-investment led agenda. Its investments include Mobius Motors, a Kenyan automaker, and Shea Yeleen International, a social enterprise involved in selling and using shea butter products.
One Thousand & One Voices (1K1V)
Although not a family office, this private equity manager invests in Sub-Saharan Africa with an exclusive limited partner (LP) base of leading global family offices, led by the Coors family of U.S. brewing fame. The firm started eight years ago with a fund to invest in Sub-Saharan Africa backed by brewing scion John K. Coors and other wealthy families. Owned and run by Hendrik Jordaan, a South African-born attorney, it was launched to invest in Sub-Saharan Africa. To date, the firm has invested in businesses – mainly family firms – in agriculture, consumer products, health foods, edtech, and mobile payments in Africa.
Looking into the future. We will be watching some noteworthy investments and analyzing our African families’ investment choices. As we continue, we should note that the single-family office generally takes the form of a private company that manages the investments and trusts of ultra-wealthy individuals, normally with net assets of over $1 billion and their extended family. This has a small team consisting of a lawyer, an investment specialist and an accountant. Given the limited scope of billionaires, we may see a lot more multiple family offices rise. Multi-family offices are a more popular option for the upcoming wealth builders.
Simply put, these families do not have the economies of scale to establish stand-alone family offices. The multi-family office will allow them to share administrative costs. Family offices look after managing household staff, property management, philanthropy coordination, managing family education, inter-generational transfer and legal and tax services, on top of the usual investment services.
Tsitsi Mutendi is a co-founder of African Family Firms, an organization that aims to facilitate the continuity of African family businesses across generations. She is also the lead consultant at Nhaka Legacy Planning and the host of the Enterprising Families Podcast.
