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Family offices face a unique challenge among wealth managers of marrying long-term investment goals with the existing family’s values.

This combination has recently come under the spotlight in part due to two key changes; namely, the shift in the economic landscape and the changing nature of these values as families enter the next generation.

After a period of relative calm, many family offices now find themselves trying to realign existing portfolios while simultaneously seeking to bring the mandates of the new generation of families into reality. While apparently separate, these two occurrences do have one thread in common; an increase in the presence of and interest in private market assets.

Doubling Down on Private Markets

To better understand the role private markets play for family offices, Moonfare teamed up with Global Partnership Family Offices (GPFO) to survey 55 representatives from family offices with investable assets ranging from $0-50 million to over $1 billion.

Roughly 58 percent of our respondents indicate their family offices have increased allocation to private markets in the last two years. Just under a fifth said they have done so significantly.

Similarly, over half hold a positive outlook for private market assets over the coming year, by contrast, family offices are much less enthusiastic about public market securities. For instance, over three quarters indicate a negative outlook on public fixed income.

Focus on VC and Growth Assets

For nearly a quarter of our family offices, exploring new asset classes is a priority when it comes to adjusting their investment processes in the near future. More than half of respondents identified that both venture funds and direct venture deals are primarily used when it comes to private market allocation, followed closely by growth funds and direct growth deals.

Regarding future allocations to private markets, family offices again indicate a preference for venture and growth deals. However, compared with current allocation, a greater percentage of respondents are looking to allocate more to co-investment opportunities across debt, growth and venture in the future than now.

Significant Benefits

Around 80 percent of respondents identify both higher risk-adjusted returns and the ability to be a value-add investor as significant benefits of private market investing. However, family offices also identified liquidity issues, general risk concerns and a lack of knowledge of the asset class as key barriers preventing further investment.

Overall, our report highlights that family offices are taking the opportunities presented by private markets seriously, while also recognizing that challenges lie ahead. The institutions able to overcome these hurdles stand well-positioned to serve the next generation of wealthy families.

This survey has been released in tandem with the launch of the Moonfare Private Investment Office, our dedicated private markets platform empowering eligible family offices to invest in exclusive private market funds.

  • To read the entire report visit Moonfare’s white paper section, the home of our regular insights on how to navigate private markets.

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