Industry experts discuss family offices’ growing willingness to cut out the middle man and invest in private deals without an intermediary.
In spite of most affluent individuals creating wealth through entrepreneurial endeavors of their own, family offices have historically been reluctant to take investments into their own hands through private placements. In recent years, however, a number of economic and industry environment factors have driven an uptick in direct investing that shows no sign of slowing.
Jolyne Caruso, CEO of New York-based The Alberleen Group, which connects family offices with direct investing opportunities, attributes this change in part to the less-than-desirable performance of other investment opportunities. “We saw a pick-up, starting post-2008, in direct investing mostly attributable to the weak performance of hedge funds and PE funds,” Caruso says. She points out that family offices have become less enthusiastic about hedge funds and private equity due to high fees, clawbacks and lack of liquidity.