Embracing the future: Next gen drives new era of family offices
Sean Koh is a well-known fixture in the music industry. He’s an Asian-American R&B pop sensation who has performed on shows such as “Showtime at the Apollo.” When he was a teenager, he turned down a record contract to be part of a K-pop group, instead choosing to get his undergraduate degree at Wharton. He launched his own record label in his dorm room and has been actively involved in supporting emerging artists ever since.
But what many may not know is that he hails from the prominent Koh family, whose family office had its humble beginnings in South Korea before World War II.
“Coming from an immigrant family that expects you to make it on your own and living with a greater purpose to empower others as ‘ESKOH’ (every situation kan offer hope), I have applied these portions in my own unique ways through music, technology and philanthropy,” he explained, using an acronym that plays on his family name.
Today, Koh is a serial entrepreneur, and not just in the music world. He’s fascinated by technology and is an active speaker on the conference circuit, spreading the word about how he can engage with other investors and make a global impact as a result.
SHROUDED IN SECRECY
Next-gen family members like Koh may be known for their forward-facing outlook and approach and being more public about their deals, but historically, single-family offices have been shrouded in secrecy.
What was once the Holy Grail of family offices was defined as a private entity that directly handles one family’s wealth and invests only on behalf of that family. Given the nature of dealing with extreme wealth, family offices kept a close guard around the details of the family’s structure, business dealings, tax, trust, travel and household management.
Industry experts believe the secrecy dates as far back as 1882 with the creation of John D. Rockefeller Sr.’s family office. The American industrialist and co-founder of the Standard Oil company needed help organizing his complex business operations and his family’s investment needs, thus giving birth to the first American family office.
Since then, prominent families of wealth have followed suit, aspiring to have a “white-glove family office” remaining secretive and discreet on all levels.
Finding a family office was once nearly impossible — there were no SEC filings to search, no website to look up and certainly no social media accounts to follow.
But what worked in the past is being challenged by a new paradigm driven by the rising next generation.
“There used to be this image of a single-family office and wealthy families being below the radar,” said April Rudin, CEO of the Rudin Group. “But the truth is, the radar has changed because of the internet.”
Rudin points out that both private and public information is easily found on the internet today — everything from marriage and birth certificates, addresses, homes in trusts and beyond. “There’s a way of putting together and creating a profile of people, and the next gen already knows this,” she said. “They want to be above the radar but control their message and find something that represents them to their peers.”
Next-gen family members tend to be more entrepreneurial than earlier generations and are excited about the idea of co-investing, taking board seats on companies they invest in and raising capital for exciting new ventures. That's something that prior generations shied away from to avoid being in the limelight.
“If a family made their money in biotech and are looking to diversify, how do they communicate what that biotech experience is and how other families can benefit from their experience?" Rudin said. "Next-geners are not as rigid and think about expertise and are more collaborative about all different types of experience for everyone’s benefit.
Said Jennifer Katrulya, president of the Family Office Association, “The next gen wants to have a voice and create their brand but also be respectful of the family’s legacy.”
German entrepreneur Cris Zimmermann is currently building out his own event in Europe in the fall, dubbed the Medici Gathering to reflect his fascination with the Renaissance. The business owner and serial entrepreneur is looking to collaborate with philanthropic and arts-minded families globally to help further his personal mission.
STEPPING OUT OF THE SHADOWS
Koh is expanding his own business empire and charting his own course while remaining respectful of the generations that came before him. He recently launched the new era of his family office, now called Koherent. He’s actively working on a new business concept called Proof of Reception (PoR) to help companies and businesses validate information from social media sites.
“Social media for me is a double-edged sword," he said. "Having studied at Wharton and being market-centric, my actual motivation for social media is simply that the market is on social media, especially for my music in particular.
"Unfortunately, social media users do not realize that everything they do on those platforms, even their own identity, is owned, controlled and violated by third-party AI algorithms. That's why I invented PoR so that you can free, empower and protect your online portions based on your own preferences.”
At the end of the day, next-gen family members are more willing to put themselves out there than ever before.
Said Rudin: “It’s about the collaboration and not the isolation.”