Gwen Williamson Offers Insight on Family Offices Managing Outside Investments in Crain Currency

Investment management partner Gwen Williamson spoke with Crain Currency about the growing trend of single-family offices launching funds and co-investment vehicles for outside investors and the regulatory considerations that accompany those efforts.

Williamson explained that when a single-family office starts managing money for outside investors from the same office suite, the new business needs its own door, along with separate addresses, servers, and email domains. “They really need to be run as separate businesses.”

According to Crain Currency, under the US Securities and Exchange Commission family office rule, a single-family office can provide investment advice for compensation only to “family clients,” making outside investors a potential threat to that exemption.

Williamson noted that while families can register the whole operation, doing so requires reporting the family’s own money alongside everyone else’s. “Most folks don’t want to do that,” she said. Instead, many establish a separate registered investment adviser with its own policies, procedures, and chief compliance officer.

Williamson also emphasized the importance of maintaining clear separation between the two entities. “No one that has control of the pot of money on the registered investment adviser side can also have access to the pot of money on the single family office side, and vice versa.”