In recent years, family offices have continued to gain popularity among high-net-worth individuals in China.

As early as 2022, according to the white paper on the development trends of the family office industry jointly released by Swiss Credit Suisse and Hurun Research Institute, the number of institutions named 'family offices' in China has approached 10,000, with a year-over-year increase of over 100%, mainly concentrated in cities like Shanghai, Shenzhen, Beijing, and Hangzhou.

At the same time, the Monetary Authority of Singapore (MAS) and several authoritative institutions (such as Bloomberg, The Straits Times, UBS, Temasek Family Office Association, etc.) disclosed that by the end of 2023, the number of Single Family Offices (SFO) registered in Singapore has surpassed 1,100, an increase of more than three times compared to 2020. Among them, over 40% of the founders are high-net-worth families from mainland China and Hong Kong.

The rapid expansion of family offices has also brought about structural changes in asset allocation preferences.

(2024 Asian Private Wealth in Digital Assets report) points out that during 2024, many high-net-worth individuals and family offices have increased their digital asset allocation from less than 5% to over 10%, with plans to further increase in the next 12 months. A report from Citi Private Bank's (2024 Global Family Office Survey Insights) also shows that about a quarter of surveyed family offices have invested or plan to invest in digital assets, with the Asia-Pacific region particularly leading, as 37% of respondents have engaged or expressed clear interest.

Portal Labs has also mentioned in previous articles that for high-net-worth investors in China, family offices may be the key vehicle for entering Web3 investments. However, to understand why family offices can naturally align with Web3, we need to return to the fundamental question: what problem does a family office actually solve?

What is a 'family office'?

In the world of high-net-worth individuals, family offices are regarded as 'the ultimate form of asset governance.'

It is not a financial product nor a type of institutional service, but a complete exclusive management system built around family wealth, or simply understood as an organizational structure that serves the family itself.

According to different management methods and service entities, family offices are further subdivided into the following typical types in practice:

1. Single Family Office (SFO)

The most common form of family office, established by a single high-net-worth family, serving only the members of that family.

SFOs typically have dedicated teams responsible for asset allocation, tax planning, legal affairs, inheritance arrangements, charity management, and other dimensions. Their advantage is 'complete autonomy and full control,' but the costs of establishment and operation are high, making them suitable for ultra-high-net-worth families.

2. Multi-Family Office (MFO)

Established by professional institutions, serving multiple families, usually built on the foundation of financial institutions, law firms, and trust companies.

MFO's advantages are 'resource sharing and professional services,' able to cover core needs such as investment advisory, family governance, and legal structure while reducing manpower and operational costs, suitable for medium to high-net-worth families.

3. Virtual Family Office (VFO)

Not an independent institution but a combination of outsourced professional services, such as hiring family trust advisors, tax consultants, financial advisors, etc., to form an external cooperative network, creating a 'lightweight' operational structure.

The advantage of VFO is 'flexibility and pay-as-you-go,' suitable for families at the initial stage of establishing a family office.

4. Overseas Established Family Offices (e.g., Singapore SFO)

In recent years, a cross-border architectural path has emerged, commonly seen in high-net-worth individuals in mainland China establishing Single Family Offices (SFO) in places like Hong Kong and Singapore to meet their needs in global asset allocation, tax structure optimization, identity planning, and more.

Such family offices usually combine domestic family members, offshore company structures, and overseas financial service resources to form customized solutions that ensure regulatory compliance and a global perspective.

However, even if the types differ, the common goal of family offices is not to pursue short-term profits but to build an exclusive management system that can transcend cycles and adapt to generational inheritance. Therefore, in terms of functional design, family offices are usually built around the following core modules:

  • Tax and legal structure design. Optimize tax costs and avoid compliance risks through cross-border entities, trusts, fund structures, etc.;

  • Asset allocation and investment management. Set long-term investment strategies, integrating various asset types like real estate, equity, funds, and digital assets;

  • Family governance and inheritance mechanisms. Develop plans for equity, dividends, inheritance, and education to ensure the continuation of family intentions;

  • Daily administrative and support services. Cover legal advice, secretarial teams, accounting services, and even health management within 'full custody' services.

However, as Web3 and crypto assets gradually enter the mainstream view, family offices are also being pushed into a brand new asset structure transformation. High volatility and high technical thresholds of crypto assets seem to contradict the concept of 'steady inheritance.' But it is precisely this system that emphasizes governance structure, resource allocation, and long-term perspective that gives family offices a natural advantage in seemingly incompatible areas.

Why 'family office'?

The reason family offices can naturally align with Web3, especially in investment paths like RWA, lies in the fact that they are governance systems born for 'complexity.'

First of all, the underlying structure of RWA projects often crosses regions, laws, and currencies.

Whether through tax bonds issued in the US or tokenized real estate under the Singapore framework, the investments involved not only cross-border payments but also include the design of inflow and outflow paths, tax compliance disclosures, legal responsibility divisions, and multiple levels. Without the corresponding legal structure or holding entities, investments may not only be difficult to implement but could even be directly blocked due to identity, account, or tax issues. Family offices, especially those with trust, SPV, and offshore holding chain structures, are precisely the most commonly used 'universal channels' to penetrate multiple jurisdictions.

Secondly, under mainstream regulatory frameworks such as SEC and SFC, many structured products are limited to 'qualified investors'—this is both a threshold and a protection.

Family offices naturally have a 'compliance identity': they can act as legal entities for institutional investments and can also serve as legally qualified investors to undertake complex equity arrangements in future token issuances, income certificates, and tokenized equity. This compliant identity not only helps avoid the red lines restricting individual investors but is also a prerequisite for gaining the trust of project parties.

Thirdly, the investment rhythm of family offices naturally aligns with the lifecycle of RWA assets.

RWA is not a quick buy-and-sell transaction but an asset management process of 'construction period - operation period - exit period.' The advantage of family offices is that they do not chase short-term returns but are better at executing long-term strategies involving 'budget-execution-adjustment.' Compared to individual investors and traditional VC, family offices not only accept asset lock-up and phased exits but even proactively cooperate with project rhythms for reinvestment and increasing holdings, thus achieving more stable rights distribution.

Fourthly, family offices are not merely funders; they are also governance-type capital that can participate 'embeddedly.'

In projects with governance structures like RWA, family offices not only provide funding but may also take on multiple roles, including financial auditing, custody, governance supervision, and even holding entities. They deploy resources with 'family interests' at their core, are willing to invest in long-term collaborative teams, and find it easier to gain institutional authorization and collaborative division of labor from project parties.

More critically, the intrinsic qualities of family offices are naturally aligned with the current compliance evolution direction that Web3 is promoting:

  • Large fund volume and stable style. Family office funds typically range from tens of millions to several billion dollars, preferring medium to long-term allocations, capable of withstanding volatility, and not relying on short-term speculative returns;

  • High compliance requirements and slow decision-making. Family offices generally come equipped with legal, tax, and trust teams, acting as 'picky buyers' that promote compliance disclosures and clarify asset structures in Web3;

  • Clear asset preferences. Predictable returns, controllable structures, clear legal frameworks, and transparent governance. This aligns precisely with the directions that emerging products like RWA, DePIN, and fund-type tokens strive to meet.

From this perspective, family offices are not 'old capital' mistakenly entering the new world of Web3, but rather one of the most fitting types of long-term capital after Web3 transitions to structured, compliant, and value-accumulating stages. Especially as RWA is viewed as a 'key node' in this round of grand narrative, the entry of family offices is not at the trend's edge but at its core.

Conclusion

In the past, we often said that Web3 lacked funding, channels, and understanding. But with the involvement of family offices, these three issues are being quietly addressed by a more mature governance framework.

Whether it is cross-jurisdictional compliance structures, structured investment rhythms, or complex asset management capabilities, family offices essentially provide not a specific product but a capability system adaptable to long-termism.

It is precisely because of this that it can penetrate the seemingly chaotic appearance of Web3 and calmly build a bridge linking real-world assets and on-chain rights.

However, it is worth noting that family offices are not a panacea; they have very high requirements for fund volume, governance capabilities, and structural sensitivity.

In the next article, Portal Labs will continue to analyze: what types of investors are suitable for family office paths? How should a truly 'usable' family office structure be established?


*Note: Investment carries risks; please participate in Web3 under legal and compliant conditions.