Abstract

Family Offices (FOs) have turned into significant contributors to private equity (PE) and venture capital (VC) funds. As pure private wealth, they are often not subject to government regulation, and exhibit long investment horizons, often spreading across generations. As such, they provide a unique perspective into long-term, unconstrained investment behaviours and portfolio allocations. This paper, based on extensive clinical analyses of the largest FOs in Europe, investigates the single family offices’ investment behaviour when it relates to risky asset classes such as private equity and venture capital. Commissioned and jointly run with the European Venture Capital Association (EVCA), it is the first in-depth analysis of the investment behaviour, processes, structures and allocations of this investor group. We also develop a new typology of FOs. We show how aspects such as family history, the generational distance to the founder and the size of the clientele served by the FO affect the establishment and development of the FO, objectives, processes, structure and allocations to PE and VC. We also provide confirming evidence that European FOs do operate on a multi-generational time horizon, have broad networking abilities and the ability to move quickly in changing and difficult circumstances.

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