The Important Role of Family Offices in Web3 Investments

In recent years, the popularity of family offices among high-net-worth individuals in China has continued to rise. An industry white paper from 2022 shows that the number of institutions named "family office" in China has approached 10,000, more than doubling year-on-year, mainly distributed in cities such as Shanghai, Shenzhen, Beijing, and Hangzhou.

Meanwhile, data from the Monetary Authority of Singapore and several authoritative institutions show that by the end of 2023, the number of registered single-family offices in Singapore has exceeded 1,100, more than tripling since 2020. Among them, over 40% of the founders come from high-net-worth families in mainland China and Hong Kong.

The rapid growth in the number of family offices has also brought about changes in asset allocation preferences. A report from 2024 indicates that 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 this over the next year. Another global family office survey report shows that about a quarter of the surveyed family offices have invested or plan to invest in digital assets, with the Asia-Pacific region leading in this area.

To understand why family offices can naturally align with Web3, we need to go back to the beginning: what problem do family offices actually solve?

Types and Functions of Family Offices

Family offices are regarded as the "ultimate form of asset governance" and are a comprehensive management system built around family wealth. Depending on the management methods and the service providers, family offices can be classified into the following typical types:

1. Single Family Office (SFO): Established by a single high-net-worth family, serving 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.
4. Overseas Family Office: Establishing SFOs in locations such as Hong Kong and Singapore to meet global asset allocation needs.

The core functions of family offices include:

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

The Fit Between Family Offices and Web3

The reason family offices can naturally align with Web3, especially in the investment path of assets like RWA, lies in the fact that they are governance systems born for "complexity":

1. Cross-border structure: Family offices have the capability to handle complex investments across regions, legal systems, and currencies.
2. Compliance identity: Family offices naturally possess the status of "qualified investors" and can undertake complex equity arrangements.
3. Long-term investment: The investment rhythm of family offices naturally aligns with the lifecycle of RWA assets.
4. Embedded Participation: Family offices can take on multiple roles in projects and engage deeply in governance.

In addition, the intrinsic characteristics of family offices are highly consistent with the compliance evolution direction of Web3:

• Large capital volume, stable style
• High compliance requirements and prudent decision-making
• Clear asset preferences, pursuing predictable returns, controllable structure, clear laws, and transparent governance.

Conclusion

The involvement of family offices is providing a mature governance framework for Web3, addressing issues such as funding, channels, and cognition. What it offers is not just specific products, but a capability system that adapts to long-termism.

However, family offices are not a panacea; they have very high requirements for capital size, governance capability, and sensitivity to structure. In the future, we will continue to explore: what kind of investors are suitable for the family office path? How to establish a truly "usable" family office structure?