What family offices really want when they invest in a fund - London Business News | Londonlovesbusiness.com

Family offices are relevant to emerging and mid-sized managers because they already invest in private markets and often continue increasing exposure, with alternatives averaging 42% of their portfolios. Their capital is attractive due to long-term orientation and flexibility, allowing them to move with greater conviction than larger institutions. Many family offices have principals closely connected to the family’s capital and legacy, with over three-quarters moderately to extremely involved in operations, strategy, asset allocation, and investment decisions. Alignment of interests is a central filter, with fund managers expected to demonstrate compatible incentives, concentration discipline, and risk tolerance. Co-investment is especially revealing because it can provide transparency, stronger alignment, and direct participation in value creation, while also addressing staffing and technical constraints through managers’ institutional discipline and clear processes.

"Family offices are relevant to emerging and mid-sized managers because they are already active in private markets and, in many cases, continue to increase exposure, with alternatives now representing an average of 42% of family office portfolios."

"More than three-quarters of family offices have principals who are moderately to extremely involved in managing operations, strategy, asset allocation, and investment decisions. Alignment of interests has become a central filter through which trust in a fund manager is assessed and a crucial consideration when evaluating a fund. Many family offices want clear evidence that the GP's incentives, concentration discipline, and risk tolerance are genuinely compatible with their own."

"Co-investment has become particularly revealing in this context. Family offices often want access to opportunity, but not always through a rigid, one-size-fits-all format. Co-investment can be attractive because it offers greater transparency, stronger alignment and more direct participation in value creation. At the same time, many family offices face staffing and technical resource constraints, which can limit how much they are able to execute alone."

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