A Guide to Family Offices and the Role of Art

Image by redcharlie sourced from Unsplash.

Family offices sit at the intersection of capital stewardship, enterprise planning, and intergenerational planning. Historically, art has entered the conversation later – acquired through personal passion rather than embedded as a deliberate strategic allocation. In this story, we report on how that dynamic is shifting.

Increasingly, family offices are treating art as part of a broader legacy-building and portfolio diversification strategy. Reports like the Art Basel & UBS Art Market Report 2025 and institutional commentary from Morgan Stanley have reinforced art’s recognition as an alternative asset class within sophisticated wealth structures.

What is a family office?

At its simplest, a family office is an organisation, typically set up as a distinct, privately held company, sometimes with an operating team sitting alongside trusts and holding entities. The office is designed to manage a family’s financial affairs and adjacent needs—investment, strategy, structuring, administration, philanthropy and succession planning. 

Importantly, “family office” is not a defined legal term but a market descriptor, generally used to refer to high and ultra-high-net-worth families with formalised governance. These families may hold assets ranging from the multi-millions to the billions and are focused on safeguarding long-term continuity. 

The way the office operates—and the extent of its activities—are ultimately determined by the family itself. The model can therefore encompass a wide range of functions and objectives: preserving and growing wealth for lifestyle management, philanthropic giving, property acquisition, launching new enterprises, direct investment into public markets or establishing trusts for education and intergenerational planning. 

How have family offices evolved?

Historically, extreme wealth was concentrated in the hands of monarchies, rulers, and aristocratic elites, where political power enabled the accumulation of land, tribute, trade revenues and natural resources – whether under Cesar, Mansa Musa or Marie Antoinette. What is less often acknowledged is that such fortunes required structured management long before the term “family office” existed. 

The modern-day family office is usually traced back to Rockefeller Capital Management, which dates its origins to 1882 as the office established to manage the affairs of John D. Rockefeller. While historic arrangements differ from today’s regulated, investment-driven structures, they resemble early forms of embedded single-family enterprises: organised systems designed to preserve wealth, manage risk, coordinate assets and ensure generational continuity.  

For similar reasons, Compound Planning has observed that “family offices could be the market’s most creative investors,” given their goals, risk profiles and investment strategies are guided by the long-term values and priorities of the family itself. 

Different commercial and investment options

Family offices typically invest across a diversified mix of traditional and alternative assets, balancing capital preservation with long-term growth and intergenerational planning. UBS reports that core allocations often include listed equities, fixed income and private markets, alongside direct investments in third parties and the family’s own operating businesses. 

Property remains a cornerstone asset class, particularly in jurisdictions such as Australia and the UK, offering both income yield and capital appreciation. The Knight Frank Wealth Report 2025 found that 28% of global family offices increased real estate exposure over the past 18 months. Approximately 70% of family office real estate investment remains domestic, with the strongest home-market allocations in New Zealand and Australia, where allocations exceed 90%. 

Increasingly, family offices are expanding into private equity, venture capital and sustainable energy investments. A 2024 survey by Deloitte found that many are engaging specialist advisers beyond their immediate family networks, reflecting a shift from passive wealth management to active ownership. Alternative assets, including art, collectibles, and cultural property, are typically introduced later in portfolio construction as part of diversification and legacy strategies. 

The philanthropic side of it all

For many families, philanthropy is where a family office shifts from being purely a financial engine to investing in charitable or legacy-building initiatives. Legally, philanthropic vehicles are often established through trusts or foundations and therefore form a significant part of succession planning. These structures can also support tax efficiency and broader estate optimisation. 

In Australia, one of the most common dedicated structures is the ancillary fund. The Australian Charities and Not-for-profits Commission describes ancillary funds as special-purpose funds that link donors to organisations endorsed as deductible gift recipients, distinguishing between private and public ancillary funds. 

Art and legacy - how does it fit in?

Art often enters the family office journey once foundational governance and investment structures are in place. When it does, it typically serves two overlapping functions: cultural legacy and identity, and portfolio diversification. 

Art markets are highly illiquid, fragmented and opaque, with many transactions occurring privately and transaction costs higher than those of traditional assets. Unlike equities or bonds, artworks generate no cash flows and are influenced by subjective factors such as taste and market sentiment, making pricing difficult to forecast. However, using long-run price data from sources such as Artnet and auction house records, Morgan Stanley’s Global Investment Committee has produced return estimates and correlations suggest that art has historically delivered positive returns over both strategic (7-year) and secular (20-year) horizons. 

Unlike traditional financial assets, artworks also carry narrative value. They reflect a family’s identity, interests and long-term vision. Over time, collections often become intergenerational projects – curated, expanded and ultimately transferred as part of broader estate and succession planning – contributing to a lasting family legacy. 

The questions to ask when working with a family office

If you are an artist, dealer or gallery engaging with a family office, it is worth understanding the structure you are dealing with. Not all capital is deployed in the same way, and not all decision-makers sit where you might expect. 

Before entering into a significant transaction, collaboration or long-term placement, consider asking: 

• What is the office’s objective in acquiring this work: investment, philanthropy, legacy or personal collecting? 

• Through which entity will the work be acquired: an individual, trust, foundation or corporate vehicle? 

• Are you dealing with the appropriate person – do they have decision-making authority? 

• Are there governance, reporting or compliance requirements that may affect timing or documentation? 

• If the work is intended for donation, lending or resale, has this been considered from the outset? 

• How will ownership, valuation, insurance and succession be managed over time? 

Looking Ahead

As family offices become more active participants in the cultural economy, the art market will increasingly intersect with formal governance, compliance and long-term planning frameworks. 

Where art, governance and capital intersect, clarity matters. We work with families, artists and cultural stakeholders to structure these relationships thoughtfully and with foresight. Get in touch with us. 

The contents of this article are of a general nature only. They are not and should not be used as legal or financial advice.