Intelligence
Data-driven news and insights on the latest ecosystem trends, the forces shaping them, and what to expect next — helping family offices benchmark their peers and helping service providers understand how family offices allocate capital.
One of the biggest mistakes family offices make isn't hiring the wrong people — it's keeping the wrong functions in-house. A four-part framework — Criticality, Ownership, Resource scarcity, Economies of scale — for deciding what stays internal, what's hybrid, and what should be outsourced.
Two funds can run the exact same strategy and still create very different GP incentives depending on how carry is calculated — deal-by-deal (American) or at the fund level (European). Which structure would you, as an LP, prefer?
Family offices split broadly into two camps — wealth preservation and wealth creation — and most pitches fail because operators don't tailor their approach to which one they're in front of. No family office wants to waste time hearing a pitch that doesn't fit its investment philosophy.
VC returns follow a power law — most deals lose money, and only a handful drive fund performance. Without dedicated risk-assessment expertise or a genuine deal-access advantage, family offices are usually better served by specialist fund managers than direct VC bets.
The hardest part of private markets isn't sourcing deals — it's disciplined selection. Top performers commit to roughly 1% of the dealflow they see; for lean family office teams, that means clear mandates, strong operating partners, and better screening tools.
A BlackRock study of nearly 9,000 manager hiring decisions found that managers fired after weak performance often go on to outperform, while recently-hired top performers often disappoint — a warning against chasing recent returns over fundamentals.
Family offices bring structured strategy to private equity and venture capital, yet often treat real estate as a secondary allocation. Three purposes should be defined upfront — yield generation, tax optimization, and capital appreciation — before deciding between core, core+, or value-add.
One family office pivoted its real estate strategy entirely — not from analysis, but as a reaction to one partner's poor performance. Every asset class needs a defined role in the portfolio; without it, strategy becomes reactive and returns suffer on a risk-adjusted basis.
The primary risk in family offices stems from governance breakdown, not underperformance. Informal governance can work for a long time — until it doesn't. Structure doesn't replace trust; it makes it sustainable as complexity compounds across generations.
A €10m fund investment typically spreads across 20-30 assets — the same capital deployed directly often concentrates into just 1-2. First-look rights within funds and complementing direct exposure with public instruments (like listed REITs) can preserve diversification without sacrificing conviction.
Family office capital is stickier, more patient, and carries sector expertise institutional capital lacks. Policies like the 1031 exchange show what works; recent UK tax changes and European red tape show what doesn't. Countries that get this right will win the capital.