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Family Offices Becoming Less Secretive, More Open

March 20, 2020

In recent years, more and more firms seeking to raise capital are looking to the family office space for funding. Family office funding is desirable thanks to its freedom from institutional mandates, long-term staying power and potential for add-on fundraising, and general flexibility, among other positives. The family office space was once largely considered secretive and difficult to access, if not inaccessible. Contact details for these offices (especially those representing single families) were scant; email addresses and phone numbers were hard to come by, rendering it nearly impossible for investment partners to reach out. Consequently, offices weren't apt to publish details on their portfolios and investment criteria.

However, as more capital raisers turn to the space for funding, family offices are finding it more beneficial to become forward-facing: going public with their investment criteria, portfolio, and contact information allows the family office to gain new partnerships and gives capital raisers access to a niche, unique untapped pool of capital. As family offices go more public, it's also become noted that these firms are highly interested in alternatives, an advantage for hedge fund managers, venture capitalists, and the like.

With family offices seeking a variety of companies and funds both public and private with which to diversify portfolios, it only makes sense that these offices would begin to make themselves more public, attending industry conferences and providing their contact details. In previous years, ultra-rich single-family offices would be shrouded in secrecy, keeping a close cover on their wealth and activities, deploying their capital from time to time but otherwise maintaining a high degree of secrecy. Nowadays, it isn't uncommon to see a large single-family office, such as Hong Kong business magnate Li Ka-Shing's Horizons Ventures, making public the details of their investments in such coveted asset classes as venture capital and life science.

Another benefit for ultra-wealthy single-family offices to go public is the ability to network with and learn from other family offices, swapping ideas and making investor introductions. Barron's notes that "many single-family office practitioners, once happy to work alone, are now eager for insights they can gain from their peers and will seek out opportunities to network with the right people." The positives abound for family offices to become receptive and forward-facing: investors benefit from flexible capital, and family offices get the opportunity to make new connections and grow networks.

By providing continuously updated family office data, capital raising tools, and solutions, FINTRX continues to bring transparency to the family office ecosystem. If you are interested in learning additional information on our proprietary research, please click here.

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Written by: Kathleen Leahy

Kathleen Leahy
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