Those engaging directly rather than through funds have also appreciated the ability to avoid the management charges and performance fees (although the costs of properly researching, transacting and managing these investments in-house should not be underestimated). On the financial side, with historically low interest rates family offices have had to revise their investment strategy and have been attracted by the potential returns they can generate from private equity. This includes their rationale for investing in PE.
Managing the wealth of a family, their strategy is typically driven by a range of both financial and non-financial objectives. What is the attraction?įamily offices are created by and for ultra-wealthy families and they come in all shapes and sizes as a result. With an estimated 7,300 single family offices worldwide responsible for around US$ 5.9 trillion¹, their growing influence in the sector should not be underestimated. According to a survey by UBS in 2020, 77% of family offices have some form of private equity investments, allocating around 16% of their portfolios on average (split 9% direct investment and 7% funds). More family offices have included private equity in their portfolios and those already doing so have been increasing their allocations. However, over the last decade, there has been a significant increase in interest. For many family offices, investing in private equity is nothing new.
