Family Office: The Emerging Force in Web3 Investment

In recent years, the attention on family offices among high-net-worth individuals has continued to rise. According to data, 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%, primarily concentrated in first-tier cities. At the same time, the number of single family offices registered in Singapore also surpassed 1,100 by the end of 2023, with more than 40% of the founders coming from mainland China and Hong Kong.

With the rapid growth of family offices, the asset allocation preferences have also undergone structural changes. Multiple surveys indicate that during 2024, many high-net-worth individuals and family offices have increased their allocation to digital assets from less than 5% to over 10%, with plans to further increase in the future. The Asia-Pacific region is particularly leading in digital asset investment, with approximately 37% of respondents having engaged in or expressed clear interest in this area.

To understand why family offices have a natural fit with Web3, we need to go back to the basics: what problem do family offices actually solve?

Types and Functions of Family Offices

Family offices are regarded as "the ultimate form of asset governance," which is an exclusive management system built around family wealth. Depending on the management approach and the service providers, family offices can be divided into the following typical types:

1. Single Family Office (SFO): Established by a single high-net-worth family and serves only 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 Establishment Family Office: Establishing SFOs in places like Hong Kong and Singapore to meet global asset allocation needs.

Regardless of the type, the primary goal of a family office is to build a dedicated management system that can traverse cycles and adapt to intergenerational inheritance. Its core functional modules include:

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

The Intersection of Family Offices and Web3

Although the highly volatile and high-tech threshold of crypto assets seems to contradict the concept of "robust inheritance," family offices demonstrate a natural advantage in Web3 investments:

1. Cross-border structural advantages: Family offices have trusts, SPVs, and overseas holding chains, which can effectively handle cross-regional, cross-legal, and cross-currency issues involved in RWA projects.

2. Compliance identity advantages: Family offices can act as legal entities for institutional investments, meeting the "qualified investor" requirements and gaining the trust of project parties.

3. Long-term investment strategy: The investment rhythm of family offices naturally aligns with the lifecycle of RWA assets, excelling in long-term strategy management.

4. Governance Capital: Family offices not only provide funding but can also take on multiple roles in projects, such as financial auditing, custodianship, and governance supervision.

5. Compliance-Oriented: The prudent decision-making and high compliance requirements of family offices align with the current compliance evolution direction of Web3.

Conclusion

The involvement of family offices is providing a more mature governance framework for Web3. It not only brings funding, channels, and insights but also offers a capability system that adapts to long-termism. Through cross-jurisdictional compliance structures, structured investment rhythms, and complex asset management capabilities, family offices are becoming an important bridge linking real-world assets with on-chain rights.

However, family offices are not a panacea; they have very high requirements for capital volume, governance capability, and structural sensitivity. Investors need to carefully consider whether it is appropriate to adopt the family office approach and how to establish a truly "usable" family office structure.