One of the most interesting trends that DealMarket Digest sees in the private equity industry is the higher profile of family offices as they make inroads into the venture and PE markets (Click “family office” to see all our articles on the topic).
The latest example of the trend emerged this week when Mergermarket reporter Marlene Givant Star filed a report from the sidelines of an Association for Corporate Growth lunch-panel conference in New York. She writes that family offices are increasingly focusing on private equity, investing in deals directly, rather than through limited partnership funds.
She says that the reason they do it to avoid the “hefty fees” charged by private equity funds, plus wealthy families come with their own networks of contacts and industry expertise (see our quote of the week to understand why someone might say that about FOs). Some families team to make direct investments.
Three family offices that do direct deals were mentioned, including City Light Capital, which invests on behalf of a family that made its fortune from manufacturing, T5 Equity Partners, which manages money for Canada’s Ghermezian family that owns the Mall of America, and Constellation Wealth Advisors.