Empty office at AccessOffice building
Empty office at AccessOffice building - 
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Steve Chiotakis: There was a time not-so-long ago when an investor could put a ton of money into a hedge fund -- and nobody would know. But then the financial system melted down and Congress decided bigger hedge funds should disclose information about who's investing and how much. Which could be a boon to something called the "family office."

Economy 4.0 special correspondent David Brancaccio is with us now from New York. Good morning, David.

David Brancaccio: How are you doing?

Chiotakis: Doing well. So what is a family office?

Brancaccio: Well, it's not a home office with a printer, file cabinet or a cat. It's an investment company that only deals with the money of a single family. A single -- very rich -- family. And here's the thing, Steve: family offices don't have to disclose detailed information under the Dodd-Frank financial reform law -- information like the names of investors, dollar figures. The privacy of a family office is attractive for folks who get nervous if you or I knew how much money they have.

Chiotakis: Now why is this in the news, though, David?

Brancaccio: Because the Financial Times reported that the very successful, very famous billionaire -- name of George Soros -- has politely asked investors in his own big hedge fund to take their money and leave the fund for good so that he can run his investments inside a family office. By the way, beyond the prying eyes of regulators.

Chiotakis: Do family offices have to report to say, tax authorities?

Brancaccio: Yeah, they do. But a tax return isn't exactly a public filing. Mariann Mihailidis, the managing director of Chicago-based umbrella organization for these things called the Family Office Exchange says disclosure makes no sense.

Mariann Mihailidis: What is the point when they're managing their own family assets? They're not taking outside investors, that there's no public interest to protect.

Chiotakis: So can get in a family office and who can't, David?

Brancaccio: Well regulators have been getting more strict on this point. They're allowed to take blood relatives -- quite a few steps removed -- and they can take spouses, but usually not the spouse's blood relatives. So your nice brother-in-law probably can't get into your family office, Steve. In fact, the Family Office Exchange is holding seminars for families to get them up to speed on the new stricter rules, and hedge funds are worried about losing business.

Chiotakis: Lives of the rich and not so famous, eh?

Brancaccio: You bet.