The Rise of Active Family Offices: A New Era in Investment and Business Operations

Operational Engagement

Beyond mere financial investment, Family Offices are increasingly taking on operational roles in their investments. This involves direct management and oversight, where they leverage their business acumen and industry connections to steer companies towards success. 

The aim is to ensure that investments align with long-term family goals, such as legacy building or societal impact, which can also serve as a platform for engaging younger family members in the business. A survey found that 76% of family offices invest directly in companies, with 83% of single-family offices worldwide considering direct investments.

Seeking New Co-Investors

The strategy of actively seeking out other HNWs and families to join investment ventures is a testament to the growing confidence and sophistication within the Family Office sector. This is about increasing the asset base and creating a community of like-minded investors who can offer mutual benefits through shared knowledge, deal flow, and network access. 

This collaborative model is seen as a way to tackle complex investments that might be out of reach for individual offices due to size or sector-specific knowledge requirements. More than one-quarter (28%) of family offices now have multiple branches, indicating their expansion and desire for broader participation.

Creating Debt Opportunities

Family Offices are also carving out significant roles in the debt markets, providing various forms of financing that traditional banks might shy away from. This includes Private Credit, where they offer loans to businesses without the oversight of public markets, Venture Debt to support growth for startups alongside equity financing, and even Private Equity debt strategies where they might finance leveraged buyouts. 

According to a recent survey, 44% of family offices said they’re likely to increase holdings of private credit, followed by private real estate debt at 42%. This not only diversifies their investment strategies but also positions them as key players in the financial ecosystem, offering bespoke financing solutions that cater to niche markets or specific company needs.

In Summary

The landscape of Family Offices is clearly evolving from passive wealth management to active, strategic investment hubs. By setting up funds, offering co-investment opportunities, and engaging with broader networks, these entities are not only securing their financial legacies but are also becoming pivotal players in the global investment scene. This active involvement reflects a broader trend towards the privatisation of wealth management and a desire to make impactful investments that resonate with personal and family values. 

As Family Offices continue to professionalise and expand their operations, they are poised to play an even more significant role in shaping economic and business landscapes worldwide. With the number of family offices expected to grow by 33% to 10,720 by 2030, their influence in the investment world is set to increase substantially in the coming years.