Preqin recently conducted a survey examining private equity fund managers’ views on family offices as investors. The sample comprised of venture, buyout, mezzanine, distressed and fund of funds managers.
Preqin’s results show that smaller private equity funds have larger proportions of family offices (and high-net-worth individuals) investing in them. The analysis shows that family offices represented 37% of the LPs in funds of less than $100mn in size. This figure decreased for funds of between $100-200mn, with family offices , on average, accouting for 28% of the total number of LPs investing in the fund. In the largest funds (greater than $200mn) however, this figure dropped even more significantly, with family offices making up only 4% of investors.
When asked to compare family offices to institutional investors, fund managers replied that family offices were more personable to deal with, less bureaucratic, but more risk averse. The relationship between the two entities still has room for improvement though, with better client services and greater transparency being cited as potential areas for improvement.