Michael Wagner Explains the Difference Between Family Office Types with Family Wealth Report
Last month, Archegos Capital Management, a family investment vehicle, took over the financial headlines as the firm and its banks began liquidating its large positions in blue-chip companies, causing certain U.S. media stocks to fall and severely damaging at least three banks. Now, as the Archegos fallout continues, many are calling for tighter regulatory oversight on family office structures.
However, it is important to note that Archegos is not a conventional family office. Rather, it is a hedge fund that followed a decade-long trend by ceasing to manage third-party funds, thereby becoming a hedge fund structured as a family office.
So what exactly makes hedge funds that morph into family offices different than a traditional single- or multi-family office? Family Wealth Report turned to Omnia Family Wealth Co-Founder and Chief Operating Officer Michael Wagner for insight.
According to Wagner, there needs to be a distinction between a family office and what goes on at Archegos, which is more of a hedge fund in nature. “There is some regulatory navigation going on,” he explains.
Unlike the events that occurred at Archegos, Wagner believes that family offices and other fiduciary-model advisors must demonstrate at times of crisis that there are “adults in the room” who are managing clients’ wealth. “We are the cooler heads and take an institutional approach to asset management and match it against family dynamics,” he tells the publication. “We take our fiduciary responsibility very seriously.”
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