By Matthew Ponsford
Worldwide, secretive ‘family offices’ turn individual wealth into dynastic fortunes for everyone from CEOs to ex-prime ministers – and they’ve made big money from the Covid crisis.
Throughout history, those born into dizzying wealth could usually be relied on to lose it. ‘Three generations between clogs and clogs‘ was the Victorian maxim, which held that any working person who amassed a fortune could near enough guarantee their grandchildren would have lost it. Even with minuscule inheritance tax, by its third generation, a rich family typically became large enough, feckless enough, or extravagant enough that there’d be no money left. Reams of data from around the world show this playing out time and again.
But things have changed. Most billionaires now vest their fortune somewhere before their descendants can lose it, all supported by the so-called ‘Wealth Defence Industry’ that counts thousands of lawyers and investment managers among its ranks. Today, the founder of a tech start-up that floats on the stock market can, the same day, vest their millions in a secretive financial vehicle that will not just pass this wealth down the generations, scarcely touched by taxes, but create an ever-growing dynastic fortune.
Obsessively secretive, the murky organisations that allow the ultra-rich to create this new sort of feudal dynasty—among them ‘family offices’, unregistered corporations, and private foundations—have shown their faces in recent scandals involving Prince Andrew, David Cameron, a collapsed megafund named Archegos, and some of the investors in the Pfizer Covid vaccine. Together they cast a little light on an industry that guards a scarcely imaginable fortune—unknown trillions of dollars worldwide—that remains blanketed in darkness….