Reinventing the Way Africans Can Preserve Their Legacies

The concept of the family office is gaining traction in Africa, opening up new ways for Africans to build generational wealth. The Legacy Haus is an African-focused multifamily office based in Lagos, Nigeria, and the family office arm of Acuity Partners. Olufunke Olumide, the managing partner, discusses the firm’s history and goals, as well as the family office landscape in Africa:

When was The Legacy Haus founded and what services do you offer?

We started as a law firm about six years ago, and four years after, the family office practice grew into a multifamily office with clients in Africa, North America and the U.K. The law firm, Acuity Partners, focuses on offering advisory services to private clients and businesses.

Our multifamily office services are tailored to African families and they cover family trust services, financial planning and private wealth, legal advisory services, property advisory services, family governance and legacy planning, concierge services, family charities and tax advisory. We also have a service called advisor coordination, where we coordinate all our clients’ professional advisors — lawyers, asset managers, tax advisors, etc., and speak with them on their behalf.

- Advertisement -

What types of asset classes are they usually looking at?

Real estate is usually the top one: residential or commercial. They are also interested in project finance deals that are short-term in nature. Also, stocks — sometimes they want funds in money markets if their risk appetite is low. In other cases, some are interested in dollar-denominated investments, so we work with our partners in other jurisdictions to get them those kinds of deals.

In Nigeria, I would say that we like ‘sharp sharp returns,’ or quick returns. The nature of private equity is a bit long-term — and many times an uncertain terrain — and many people want shorter investment periods. This is why on many occasions they look to real estate deals, private credit and other alternative investments. Notwithstanding, we find that a few investors still want private equity, but really few of them.

Quote from the article: "Some people think a family office is solely for the wealthy, so we are changing this narrative and reinventing the way Africans can preserve their legacies and build generational wealth with an independent family office."
Image by Cassidy Reed

Is the family office a new concept in Africa?

It’s a relatively new concept. We see some asset managers offer a family office service as part of their offerings, which many times limit it to just another financial service. We don’t have many family offices that are standalone businesses in Nigeria, offering other family office-related services.

To the average person we have to explain what a family office is and some of them understand the concept but just don’t know it as the term ‘family office.’ Some other people think it is solely for the wealthy, so we are changing this narrative and reinventing the way Africans can preserve their legacies and build generational wealth with an independent family office.

In Africa, we don’t really have a culture that promotes generational wealth — many people do not have the right advisors to guide them into building wealth for the next generation.

For example, in Africa, many family businesses don’t last beyond the second generation, sometimes because the founders get on to succession planning late and then receive shocking disinterest from the next generation. We advise that even when the kids have no interest in the management of the business, the business can and should survive with the engagement of non-family strong talent who would manage the business and keep up the legacy of the founders.

In the last five to 10 years, there has been more awareness about how engaging the right advisors on this journey of legacy planning, business success, and building generational wealth is the way to go.

Quote from the article: "In the past decade, there has been a move toward family office structures and setting up trusts by Africans. There has also been a bit more education and more knowledge about setting up a family office."
Image by Cassidy Reed

How do you advise people to pass on their wealth?

In Nigeria, most people who want to do their estate planning for their family wealth write a will. However, our probate system frustrates this process. We typically advise people to set up a trust. With the trust, you have greater chances of a smooth and easy transition of wealth, assets and more to the next generation.

This isn’t a new concept — a lot of people know about it — but, for us, we advise our clients to set up a private trust entity and be in control of its administration. With the trust, we can easily help with ring fencing assets for succession, business and other uses. 

What types of family dynamics do you deal with when helping families plan for the future?

A few people are a bit certain of how they want their wealth to be administered and managed. Sometimes they even go as far as saying how the trust should cater to the needs of the third generation. However, because this is still a relatively new concept, some people just start off setting up the trust for their immediate family and/or just an education trust for the kids.

We are putting together a family education plan for our clients, for people with children who want to start educating them about wealth and financial literacy, getting them to the point where they understand about investment. It would also help those who have family businesses to help them start to understand the business at a young age. It’s not to force it down their throats, but just to allow them to know what the business is about, and give them the option of being a part of it. In instances where they don’t, they at least are not aloof as stakeholders and can conceptualize the business operations.

How has the family office landscape changed in Nigeria and what are the challenges?

In the past decade, there has been a move toward family office structures and setting up trusts by Africans. There has also been a bit more education and more knowledge about setting up a family office. Eight to 10 years ago, if people mentioned a family office, even some affluent families saw it as something that could not happen in Africa — they had to go set it up in Mauritius, the U.K. or the U.S. The market dynamics have changed a bit.

As for challenges, I’ll say ‘trust’ in the sense that I think we still don’t trust the systems. Some people are not yet extremely trusting to have someone else manage their affairs — personal, financial and all — they just feel like it’s a lot of vulnerability and exposure.

Quote from the article: "There’s a notion that ‘I don’t want my business in Nigeria/Africa — I want it outside.’ This is understandable because we have some political instability and economic instability, and even our structures are still a bit shaky."
Image by Cassidy Reed

And the average African may still tilt towards setting up outside of Africa. There’s a notion that ‘I don’t want my business in Nigeria/Africa — I want it outside.’ This is understandable because we have some political instability and economic instability, and even our structures are still a bit shaky.

We give our clients the option of setting up the trust abroad or creating a system that combines different jurisdictions. Although most of our clients set up their trusts in Nigeria, we have partners who can set up a trust in Mauritius or the U.K., whilst we still manage the trust and their affairs.

About the Author

Margaret Steen

Margaret Steen is the editor of FO Pro, The Family Office Professional. Based in Silicon Valley, she has written for Family Business Magazine for more than 15 years.


Related Articles

FAMILY OFFICE + FAMILY BUSINESS

Sign up for FO PRO: The Family Office Professional. FO PRO connects family office leadership with the family.