There are more than 3,000 family offices in the United States, and a growing number are investing directly in operating companies, a stark departure from traditional means of managing wealth. A growing number of family offices that once invested as limited partners now pursue direct investment strategies to increase returns. This reduces fees and expenses while increasing transparency and decision-making authority. In some cases they have complete control over the underlying investments. This is why many family offices are being staffed with seasoned Wall Street veterans, who apply the same expertise by VC, PC and other investment funds.
Current industry data shows that the majority of family office's direct investments are in real estate, but 47 percent invest directly in operating private companies. Of the latter group, family offices held an average of 15 direct investments and entered an average of two new deals per annum in 2017.
There is a strong interest in early-stage and mid market growth opportunities. Family offices target deals from $500,000 to $1.5 million for early stage investments and larger sums -- $1.5 million to $15 million --- for middle-market investments.
The Williams Family Office Networks sets up luncheon or evening dinner events where private companies may present their business plans and capital calls.
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