- Flickr/Garry Knight
The rich used to dream of having their children grow up to be president of the US.
Now they’re more interested in having them become money managers.
That’s according to Carlyle Group CEO David Rubenstein.
During Carlyle’s quarterly earnings call on Wednesday, Rubenstein fielded a question about the firm’s attempts to break into the high-net-worth asset-management space.
He then took the opportunity to lay out the three different types of rich people.
Here’s his assessment of the top-level, über-rich (emphasis added):
When we talk about high net worth, I would put it in three categories. High-net-worth people who have their own family offices. I would say today everybody wealthy seems to want to have their family office. In the old days, everybody wanted to have their son grow up or their daughter grow up to be president of United States, now everybody wants to have their son or daughter have a family office, everybody wants a family office.
And so there are plenty of family offices out there and you take the wealth around the world, everybody who seems to have a net worth of about $300 million or more has a family office.
So instead of going after political office, the incredibly rich are setting their sights on managing and growing their own money, according to Rubenstein. This is similar in structure to something like Steve Cohen’s Point72, which doesn’t manage outside money, just Cohen’s and a small handful of others’ money.
- REUTERS/Fred Prouser
Family offices of high-net-worth people then go to places such as Carlyle with their money for assistance with investments and implementing strategies. This is a booming slice of Carlyle’s $186 billion in assets under management, according to Rubenstein.
“And so in the recent months, I’ve noticed and looking at our statistics that we are – our second biggest investor by category is high net worth,” he said.
He continued: “Historically, our biggest category was public pension funds and that is still the biggest. Sovereign wealth funds are catching up to them, but in the last, I’d say the first quarter of 2016 and for the last 12 months, our biggest second category has really been high-net-worth individuals.”
Rubenstein said that this is a global phenomenon, as family offices across Europe and the emerging markets are investing in private equity.
No word on whether this has changed non-Americans’ political aspirations, though.