The article discusses a new survey that highlights the risks family offices may be facing when making direct investments in private companies. Here are 3 key highlights from the article:
1. Many family offices are increasingly turning to direct deals, where they buy stakes in private companies without going through a private equity manager.
2. The survey reveals that family offices may not be fully utilizing their strengths as investors, with only half of them having private equity professionals on staff and lacking forceful oversight and monitoring.
3. Family offices are favoring syndicated and “club deals,” leaning towards later-stage investments, and prioritizing the quality and experience of the management team over the product when making investment decisions.
In summary, the article raises concerns about family offices taking on more risk than they realize when engaging in direct investments in private companies, citing potential gaps in professional staff, oversight, and investment strategies.
Editorial content by Avery Redwood
