Global family offices are increasingly embracing PE

Global family offices are increasingly embracing private equity (PE) as a key investment focus, especially through direct investments, according to a new report by Kharis Capital and Bastiat Partners. Nearly half of surveyed family offices plan to boost their PE allocations within the next two years, doubling expected allocations to other asset classes.

The survey of 75 family offices reveals growing interest in niche opportunities, co-investments, and innovative structures like evergreen funds and holding companies. Around 40% of family offices aim to increase PE investments by 2026, showcasing PE’s rising appeal. To support this shift, they are adopting new strategies such as direct investment, creative deal restructuring, and enhanced governance practices, addressing challenges like deal flow and networking.

Family offices prioritise diversification, control, and tailored returns, influencing private markets overall.

Key findings include:

1. Direct Investments Growth: 50% of family offices plan to expand in direct investments, gaining control and reducing fees.

2. Evergreen Funds and Holding Companies: These structures align with family offices’ long-term investment goals.

3. Re-capitalisations and Pay-to-Play: Tight capital markets create opportunities in re-capitalisations, and pay-to-play provisions offer further avenues for investment.

4. Enhanced Investment Management: Family offices are building internal expertise, adopting advanced tech, and strengthening governance, often hiring professionals from buy-side roles and investment banking.

Quality deal flow remains a top priority, with a network-centric approach aiding in co-investments and complex deal collaboration.

Source: Spear’s