Family Office professionals intensify their focus on Artificial Intelligence

The fast-paced evolution of artificial intelligence (AI) is matched only by its myriad applications. From aiding agriculture and healthcare, to tackling climate change, inequality, poverty and world hunger, the exponential growth of AI can be used in almost every conceivable area of life. Needless to say, this has not gone over the heads of family offices, naturally forward-thinking and open-minded to the possibilities of new technology as they are. 

As revealed by The Asia-Pacific Family Office Report 2023 from Campden Wealth and Raffles Family Office, artificial intelligence stands out as the most sought-after new technology from an investment perspective. A net 32% of family offices are actively looking to increase their engagement in this field, and an additional 39% are planning to initiate an exposure. 

“AI’s diverse applications, from automation to data analysis, make it a strategic area for potential growth and innovation in the investment landscape,” says Chi-man Kwan, Group CEO and Co-Founder of Raffles Family Office. “This trend reflects a recognition of AI’s transformative potential and its role in shaping the future of various industries.”

New research from Ocorian (a market leading global provider of services to high-net-worth individuals and family offices, financial institutions, asset managers and corporates), similarly found that family offices are intensifying their focus on developing AI for use in their sectors, as initial projects deliver strong results.

“It’s clear that generative AI has transformative potential for productivity, ways of working and economy as a whole,” says Yegor Lanovenko, Co-Head of Fund Services at Ocorian. “When new technologies emerge, they benefit different sectors at different times. First companies spend time experimenting with generative AI, before starting to plan to deploy on a larger scale.

“Alternative fund managers are moving from an experimentation period after achieving success with pilots to larger scale adoption for real-world use cases across investment operations, compliance and managing risks.

“Given the continued investment into AI globally, we can expect more AI products to hit the market, and there is potential for alternative managers to take the lead in early adoption with the help of partners with a strong technology and innovation ethos to navigate emerging regulatory landscape, implementation and privacy considerations.

As investors, we have always been drawn to businesses and founders with an entrepreneurial edge.

One such family office to move forward with its commitment to AI investment is Dominus, the real estate developer and FO of British-Indian businessman and entrepreneur Sukhpal Singh Ahluwalia, following the elevation to ‘unicorn’ status of Ahluwalia’s investment in Generative AI-voice firm ElevenLabs. 

“Whether it's real estate or other industries, tech will continue to play a critical role in ensuring that the UK stays at the forefront of the global economy, and we want to use our role as an investor to continue to contribute to the development of the tech sector."

Dominus’ cornerstone investment through Concept Ventures (the UK's largest pre-seed fund) helped ElevenLabs to recently raise an $80 million Series B, now valuing the company at $1.1 billion. The latest investment round means that ElevenLabs now becomes one of the UK's few tech unicorns, and one of the fastest-growing start-ups in the UK to achieve that milestone.

A recent survey from The Small Business and Entrepreneurship Council (SBEC) reveals that a growing number of small businesses are increasingly harnessing AI tools to significantly enhance efficiency, resulting in annual savings totalling hundreds of billions of dollars.

“In an era marked by inflationary challenges, AI has emerged as a crucial ally for businesses striving to maintain cost stability for consumers,” says Mark Bower-Easton, Head of Distribution at tax-efficient investment firm Oxford Capital. “By leveraging artificial intelligence, business owners can optimise various aspects of their operations, from supply chain management to resource allocation, allowing for more precise cost control. 

“Over a third of small businesses have used AI to help keep prices stable for customers in this inflationary environment. This not only cultivates trust among consumers but also highlights the pivotal role AI plays in assisting businesses to navigate economic uncertainty.”

“Change creates the opportunity to reimagine, improve, and disrupt,” Says Amanda Outerbridge, Managing Director of the Boston-based primary partnership team arm of private equity fund of funds HarbourVest. “There is significant excitement around artificial intelligence right now, and a question we often receive is whether there is real value.

“We view the recent technology breakthroughs within AI as creating fundamental, lasting value that provides an expansive and growing opportunity set. Two of the reasons we believe this are the dramatically reduced costs of modelling and the rapid adoption of AI products.”