Family offices: 'Quiet capital'
Private equity and strategic buyers aren’t the only suitors pursuing family businesses today.
Family offices, those low-key organizations formed to manage the wealth of ultra-high-net-worth families, are discreetly wooing business families who might be interested in selling a stake.
“Families that have built and grown successful businesses are increasingly looking for opportunities to invest in [other] family-owned businesses,” says Irene Mello, director of the Direct Investing Network at Family Office Exchange (FOX), a network for wealthy families and their family offices.
This relatively recent development is part of a growing trend by family investment firms to allocate a portion of their assets to investments in operating businesses. The past 24 months have seen a big uptick in this “direct investment” by the family office sector, notes Russ D’Argento, CEO of Fintrx, which provides data and research on the family office sector to the private capital markets.