April 17, 2023: How artificial intelligence is launching family offices into the future

Apr 17, 2023
1 year ago

Artificial intelligence is not just the stuff of headlines about the future — it’s already changing how some family offices operate, from parsing financial documents to cybersecurity. AI is uniquely suited to the needs of such offices, which tend to have small teams. The technology frees them to focus on other aspects of their lives, Alec Foege reports. 

Also in this issue, we show how luxury tycoon Bernard Arnault just became the world’s richest person by selling more expensive goods.

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How artificial intelligence is launching family offices into the future


“AI” is today’s buzzword. But for some family offices, artificial intelligence is already changing the way they work and helping launch them into the future. While businesses of every stripe are exploring the benefits — and perils — of enhancing their operations with AI, family offices are uniquely suited to benefit from the technology.

A family office is essentially “a very small company with limited resources in terms of people and as many as 30 large, important external relationships,” said Paul McKibbin, a managing director at EY Private Family Advisory Services. As such, family offices increasingly look to technological solutions to handle some of the labor-intensive and costly tasks associated with doing business — such as parsing financial documents, performing legal research and cybersecurity.

“AI is real,” McKibbin said. “It’s happening, and it’s quite close to our daily work.”


  • Family offices, as small companies, are uniquely suited to benefit from AI.
  • AI is helping them handle labor-intensive tasks such as parsing financial documents, legal research and cybersecurity.
  • Allowing AI to handle those tasks frees family offices to focus on other aspects of their lives.
  • In addition, AI can help family offices make higher-level strategic decisions before investing.

Automating a lot of repetitive tasks with AI and machine learning is a no-brainer, said Danielle Valkner, a partner and leader of the U.S. family-office practice at PwC. But where AI really moves the needle is in optimizing resources.

“When we think about optimizing a family office,” Valkner said, “we think about people, process, technology and data.” 


A decade ago, when former Google executive Caesar Sengupta and some of his colleagues began to accrue personal wealth, they found little in the financial marketplace to address their needs and concerns. 

“We realized that, for people like us who were fairly fortunate in life and professionals earning well, but not yet quite at the stage where we were rich enough to get good treatment from the private banks or to be able to set up our own family offices, there weren’t really many financial planning or help options available,” he said.

Now, as co-founder and CEO of Arta Finance, Sengupta uses AI to bring what he calls “financial superpowers” to a wealthy demographic previously not quite well-off enough to justify a family office ​​— individuals with anywhere from hundreds of thousands to several million dollars in assets. 

To that end, Arta has pulled together brilliant quants from the hedge fund world and hardcore techies from machine-learning hubs such as Google Research and Facebook Research and applied AI to investing research and portfolio management. Its first product is aptly called AI-Managed Portfolios, or AMPs.


High-net-worth investors working with third-party advisers may not be as aware of how AI can enhance the operations of their family office. That’s because those same advisers often are already employing AI behind the scenes to expedite processes such as parsing hedge fund K-1 forms and incorporating relevant data from those forms into tax returns.

AI is also being used to help family offices sift through volumes of legal documents to find the few records relevant to their specific situations. 

Cybersecurity is another area where AI can help leverage a larger network of solutions to help family offices protect their data from bad players — who of course are also working at a scale previously unimaginable. 

“Antiviral software on the desktop today is no longer driven by pattern matching,” McKibbin said. “It’s determining whether anything is occurring on your computer that seems out of the ordinary.”

And while many family offices may be reluctant at this point to use AI for portfolio management, McKibbin said it can help when making higher-level strategic decisions before investing. 

“These families can take advantage of leading practices everywhere,” he said.

Said PwC’s Valkner: “There is a lot of opportunity there, especially as it relates to processing the activity on private investment. That is one segment of the financial services, asset wealth management industry that remains very manual. So reading the investor capital call statements, the investment affirmation statements, the valuation statements and processing them through the technology is something AI can be very effective at.”


So far, Arta Finance has raised $90 million from around 140 angel investors, some of whom already have their own family offices. Those family-office owners are interested in AI’s equity investment capabilities, Sengupta said, because “it lets the family office focus on other aspects of their life,” such as private alternatives.

But where AI will really shine is in helping personalize an investment plan to a family office’s vision, he said. “One of the challenges with the financial industry today is alignment of interests,” Sengupta said. “One of the reasons everybody I’ve spoken with who set up a family office graduated to that was, ‘This is really focused on me.’ ”

EY’s McKibbin envisions a not-so-distant future where AI will even serve in part as the institutional memory of a family office. Answers to questions such as “Whom do we know?” or “Where is that document?” suddenly are instantly available. 

Said McKibbin, “You’re starting to see the emergence of applications that take away some of that problem.”

Arnault's wealth soars to $210 billion, leaving Musk in the dust


Bernard Arnault, the world’s richest person, is solidifying his lead over second-ranked Elon Musk. The luxury tycoon is selling more expensive goods, while the Tesla Inc. founder cuts prices on electric vehicles.

The Frenchman behind LVMH saw his fortune soar by $12 billion on Thursday to almost $210 billion, a record high and his second-biggest single-day rise ever, according to the Bloomberg Billionaires Index. Musk is worth $180 billion after gaining $3.8 billion. 

The surge in the 74-year-old Arnault’s net worth came after investors cheered quarterly sales published by the producer of Louis Vuitton handbags, Moet & Chandon Champagne and Christian Dior gowns. LVMH shares rose 5.7% Thursday to a record in Paris trading, propelling it into the world’s top 10 companies with a market capitalization of 444 billion euros ($491 billion). The stock continued its upward march Friday, rising 0.7% midday after rival Hermes International also published strong sales.

The relatively discreet Arnault — whose family owns 48% of LVMH’s share capital — joined Musk and Amazon.com Inc.’s Jeff Bezos this month as the only individuals whose wealth has exceeded $200 billion. He’s the first person outside the U.S. to accomplish the feat.

Read more of this story on our website, craincurrency.com.


Adidas founder’s family-wealth firm opens HQ in Florida: The Adi Dassler International Family Office, which traces its roots to Adidas founder Adi Dassler, announced plans to open its global headquarters in Sarasota, Florida. The office plans to eventually hire 10 employees, both wealth advisers and support staff, the Business Observer of Florida reports.

U.S. billionaires almost a third richer than in 2020: There are now more than 700 billionaires in the United States, almost 60% more than a decade ago, according to new calculations by the global charity Oxfam. The world’s wealthiest person is Bernard Arnault (see above), now worth $210 billion and extending his lead over Elon Musk. 

Tear down offices across U.S., says investor who won big in 2008: Kyle Bass, the founder of Dallas-based Hayman Capital Management and the investor who gained fame for betting against subprime mortgages before the housing collapse, says that demand for office space isn’t returning and that office buildings in cities need to be demolished. Though some have suggested turning these towers into apartments, Bass tells Bloomberg News that it’s impractical. 

Help us with a story: We’re working on a story about the art market and how to make sure that families make smart decisions when handing down those assets to the next generation. If you have any comments on the topic, reach out to [email protected].