Deploying Capital for Family Offices: Current Outlook

In 2025, family offices are navigating a dynamic investment landscape characterized by several key trends. One significant trend is the diversification of investment portfolios, with family offices increasingly engaging in both traditional and alternative asset classes such as private equity and venture capital.

This diversification is facilitated by the establishment of their own funds or investments in third-party managed funds, allowing family offices to formalize their investment strategies. The appeal of family offices as sources of capital lies in their patient capital and flexibility.

Regulatory changes are also shaping the investment environment. For instance, the US Securities and Exchange Commission recently provided guidance in an effort to expand retail access to private market investments through registered closed-end funds. This development allows family offices to explore new opportunities in private market investments through investment vehicles that have regulatory protections under the federal securities laws.

Capital deployment strategies are also evolving, with a focus on secondary markets and continuation funds. Secondary markets offer liquidity and access to new managers by enabling the buying and selling of existing private fund investments. Continuation funds, on the other hand, allow for asset extraction from existing funds, facilitating better management and potential capital infusion.

Family offices are also increasingly engaging in direct investments, which enhance deal flow through partnerships with funds and other investors. This approach not only diversifies their portfolios but also strengthens their investment networks. To support these activities, many family offices are establishing investment committees that serve as platforms for training younger generations in investment operations and decision-making. This focus on education and governance ensures the sustainability and growth of family office investments, preparing them to adapt to future challenges and opportunities in the financial landscape.

KEY TAKEAWAYS

• Different approaches to deploying capital: Fund formation, fund investment, direct investment, co-investment
• Varying opportunities across business, industry, and asset types
• Family offices continue to be attractive investment partners
• Documentation: Different agreements, styles, and issues may arise depending on capital deployment style but there are overlapping themes and issues family offices should be considering in any investment
• Conduct thorough diligence