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How do family offices put their capital to work in private markets? Ask that question a few years ago, and you'd likely have heard that exposure was built mainly through third-party funds and external managers. Ask it today, and the answer looks different: family offices aren't just increasing how much they allocate to private markets, they're increasingly choosing to implement that allocation themselves, investing directly rather than through a fund structure.
What's changed? In a trend that's continuing to gain pace, family offices across the world are not only increasing their allocations to private markets, but also changing how they access them, moving away from third-party funds and external managers, and instead building direct exposure to assets such as startups, private companies and real estate. Rather than investing alone, they're also increasingly teaming up with other family offices and investors like VC providers to make co-investments or "club deals," in which they often take a leading role.
“A clear trend that we are seeing is much greater appetite by family offices to pair up with other family offices to allocate capital directly. This is still largely relationship driven; families want to work with those they feel an alignment with in terms of values and opportunities. In seeking out direct investments, families are being opportunistic and leaning into their leaner structure to move faster and more dynamically than traditional institutions.”
Lisa Cornwell,Partner, Private Clients and Family Offices Leader, PwC SwitzerlandIt’s a seismic shift that’s been underway for several years, but which has accelerated since the pandemic, as recent industry research underlines. PwC’s Family Office Deals Study 2025 finds that family offices are steadily reducing their commitments to traditional investment funds, while also increasingly favouring club deals: co-investments represented 69% of their total transaction volume in the first half of 2025, more than double the 31% of deals that they conducted on their own. And while family offices’ direct investment activity continues to fluctuate year-on-year with market conditions, it remains core to their strategies.
Other industry research paints a similar picture. Take the BNY Wealth Family Office Survey 2025: of 282 single-family office professionals participating globally, 64% expect to complete six or more direct deals in the coming year, up from 54% in the previous study, with 69% of larger respondents intending to increase their exposure to private equity. Meanwhile, an analysis of transactions by S&P Global Market Intelligence 2026, finds that direct investments by family offices rose 123% year-on-year in 2025, to reach 158 transactions totalling US$12.9 billion in value.
New generation, new investment horizons – and rising professionalisation
So the direction of travel is clear. But what’s driving it? A closer look reveals some significant changes both within family offices and also in the investment opportunities open to them.
First, family offices themselves. In recent years, a new generation of entrepreneurs from many fast-growing industries – tech, financial services, life sciences and more – have reaped huge wealth from their efforts and set up family offices to manage it. These new entrants are highly sophisticated, tech-savvy people with deep knowledge of the full range of investments and eager to support successful startups, often in the industries where they made their fortunes. Also, when choosing investments they want to make their own decisions, rather than paying fees to an external manager to act on their behalf. The energising impact of these new wealth owners is being amplified by the unprecedented transfer of family wealth currently underway to the next generation, who are bringing their own entrepreneurial dynamism and distinctive priorities.
“When you strip everything else back, the main reason people set up a family office is because they want to do things their way, when they want, and how they want. That’s the core motivation for creating it. There’s not really a whole lot of point in going through all of that effort only to then go and outsource all the investment decisions to a traditional wealth manager. Especially with the more entrepreneurial younger generation coming through, families want more control and sovereignty over decision-making. So there’s been a fundamental shift in behaviour from a more passive attitude to a more active one.”
Laura Purbrick,Partner, Private Wealth Partner, PwC AustraliaAs this generational change plays out, the investment landscape is expanding in tandem, presenting new direct investment opportunities. An example? The rise of private markets, which have received a massive reallocation of assets from the public markets in recent years. Another? The proliferation of high-potential startups eager for investment from patient, knowledgeable, long-term investors. Private real estate opportunities have also been on the rise.
Together, this combination of internal and external change has fueled a further trend: the ongoing professionalisation of family offices, as they upgrade their investment strategies, decision-making processes and governance to be increasingly well-defined and specialised. This can involve introducing new technologies and talent on both the investment management and operations sides as well as formalizing and documenting investment guidelines and oversight through an Investment Policy framework.
“As family offices increase their direct investment activity, a well-defined investment policy framework becomes even more important. Clear guidelines at both the total portfolio and individual strategy level help establish where and how the family wants to invest, the role each strategy plays, and the appropriate parameters around risk, return and liquidity. With this framework, individual opportunities are evaluated in the context of the overall portfolio, not just deal by deal.”
Belinda Sneddon,Senior Managing Director, Family Enterprise Advisory Services, PwC USThe opportunity on offer: catalysts and objectives for going direct
Together, these developments have set the context for increased direct investment by family offices. But what are they looking to achieve? From our everyday conversations with families and family offices globally, here are the main outcomes they’re pursuing.
- Greater control and sovereignty over investment decision-making
When it comes to investing their wealth, family offices are increasingly looking for more control over where their money and the resulting returns go. They’ve also been questioning the cost and quality of the services they receive from external wealth managers, prompting them to consider building and managing their exposures in-house, often in collaboration with parties they trust and feel aligned with. They’re also keen to capitalise on their speed and agility as small organisations to dive into different markets globally where they spot emerging opportunities, especially among startups in sectors like tech, financial services, life sciences and green energy. - Closer alignment with family purpose – including investing for impact – without compromising on returns
The bedrock not just of any family office, but of the owning family’s overarching unity and harmony, is its shared purpose and values. While these invariably include safeguarding and growing family wealth, they also often encompass a desire to make a positive difference for communities, stakeholders and wider society — a trait that is being steadily reinforced by the transition of ownership and control to the next generation. Investing direct rather than through third parties enables family offices to ensure their investments embody the family purpose and priority initiatives. Over the past decade, PwC research suggests that this opportunity has seen a marked increase in the value of family offices’ impact investments, across sectors like clean energy, microfinance, healthcare, sustainable agriculture, education and housing.
“While it’s less prominently discussed currently, many family offices continue to allocate capital to impact-orientated strategies — aligning investment decisions with a family’s values, purpose, and long-term mission. Return objectives and risk management remain central, but when families can pair strong performance with measurable positive outcomes for communities and future generations, it can be a powerful combination. As wealth transitions to the next generation and younger family members take on greater decision-making responsibility, I think we will see continued momentum in thoughtful allocations to impact sectors that seek both meaningful outcomes and competitive investment returns.”
Danielle Valkner,Partner, Private Family Office Leader, PwC US- Reduced investment manager fees and greater opportunities to realise the illiquidity premium as “patient capital”
Investing direct can bring some financial benefits that effectively translate into better returns on the portfolio. One is that it avoids the need to pay external management and private equity fees for a service that sometimes may have felt opaque and beyond the family’s control in terms of exit timescales. Another – related – benefit is the ability to invest longer-term as “patient capital”, enabling the family office to realise the illiquidity premium that comes with less tradeable assets, while also reducing the time pressure on operating assets such as a startups seeking to invest for growth. This patience is one of the reasons why many startups are now favouring family offices over others as prospective investors.
“Some entrepreneurs running startups say they would never consider an investment from a venture capital fund and only want family office money. Asked why, they point to several reasons. Like the fact that family offices are not in a rush to sell. That they often understand the industry and startup culture through the family’s prior experience as entrepreneurs themselves. That they’re generally driven by purpose, really wanting to see the startups they invest in succeed. And that they’re willing to work with those startups to see the whole project through to completion, rather than being under pressure to deliver for third party investors or worrying about having to pay big fees to investment managers.”
Christine Cairns,Partner, Private Client Tax Partner, PwC UK- Better access to deal flow through a collaborative co-investment network they know and trust
Most family business and wealth owners have an extensive and well-developed network of trusted contacts, families and investment companies that make up a fertile ecosystem for collaboration and co-investment. By teaming up and pooling capital with members of this network in carefully structured “club deals”, family offices can get involved in bigger opportunities, and gain earlier and easier access to investments that might otherwise not have been open to them, such as early-stage startup investments and IPOs. The power of the network in accessing deal flow can be especially important in private markets where having the inside track can be key. - Enhanced ability to leverage and apply entrepreneurial, operational and industry experience and expertise within the family
Many wealthy families have extensive entrepreneurial experience and expertise – often shared across multiple generations – in founding and growing businesses in various industries. Whether this pool of knowledge has been built up by a founder with a stellar track record in retail, or a NextGen who has driven the growth of a FinTech startup, it can be invaluable in selecting and then supporting companies in which the family office invests directly. Applying their expertise also provides an outlet for founders’ ongoing appetite for risk, which has served them so well earlier in their lives.
Hurdles to overcome: is the family office ready to run a direct portfolio?
While the potential benefits of direct investment are clear, realising them is not always straightforward. Most family offices are lean operations by nature, having relatively few staff and often a continued reliance on basic technologies such as spreadsheets. Moving from external investment managers to direct investment demands enhanced governance, due diligence and risk management processes, underpinned by upgraded infrastructure and skills. All of this demands professional advice and costs money.
The overarching question is whether a family office is structurally ready to be an active direct investor. When it comes to running a portfolio of direct investments, an investment process that centres on one individual, and which seizes up when the owning patriarch or matriarch is unreachable, is simply not fit for purpose. Until somebody else in the organisation is authorised to make time-sensitive investment decisions at the moment they’re needed, a direct investment strategy may prove unworkable.
Five steps to take to gear up for direct investments
Bottom line? To run a sophisticated family office equipped to harness the full advantages of direct investment, owners must be prepared to “let go” and trust their people to make the right calls – while also backing them up with the necessary expenditure on infrastructure, operations and data. With this in mind, here are five steps that family offices can take to be ready for a world of direct investment.
- Clarify and formalise the family investment purpose and objectives. A scattergun approach to direct investments based on gut feel with no clear goals will ultimately run into trouble. Families should get together and agree common investment goals aligned with their family purpose, including targeted sectors and financial returns as well as societal impacts. These shared objectives will shape the asset allocation strategy, including how much to commit across strategies to enable them to achieve their desired exposure and diversification.
- Frame the opportunity set that can be pursued to fulfil the purpose. The range of asset classes that family offices can potentially invest in is expanding all the time. From startups in different industries and geographies to direct real estate to private markets to impact investments, the possibilities are almost endless. So rather than trying to take on too much at once, it’s vital to zero in on the high-priority opportunities that will be in scope.
- Implement infrastructure to enable effective due diligence, governance and decision-making. Direct investment decisions demand rigorous due diligence, which in turn requires the right supporting infrastructure, data feeds, analytical tools and risk controls. Jotting down numbers in a spreadsheet will no longer do. There are many platforms out there to choose from, and informed advice on selection and implementation is key. Having accurate, robust and up-to-date data is especially pivotal.
- Identify and recruit the skilled team you’ll need, with appropriate remuneration. As we noted earlier, moving to a family office can seem attractive to someone working in the investment industry or professional services. However, recruiting and retaining the right talent depends critically on offering the type of working environment, decision-making autonomy and compensation that makes them glad they switched. This can be challenging: for example, we’re receiving more and more requests from family offices for help designing remuneration packages for investment professionals that are competitive with what they can earn elsewhere.
- Explore the family network and trusted relationships to pinpoint and realise opportunities for collaboration and co-investments. With the investment objectives clarified and the bedrock of infrastructure, operations, data and people in place, the family and family office can head out into their ecosystem in search of opportunities to create mutual value with partners who share their values. Depending on the family’s specific strengths, the approaches adopted may range from teaming up and pooling resources with a select group of trusted family offices, to setting up sector-specific funds for other offices to invest in, to forming joint ventures with Venture Capital providers to co-invest as equals. These collaborations place a renewed emphasis on the external brand and reputation of the family and family office – in turn making it even more important to choose the right partners with the right values.
In our experience, these five steps make a family office better placed to progressively increase the proportion of direct investments in its portfolio.
Getting back to family purpose
At first sight, the move towards direct investing might appear to be a new departure for most family offices. But in many ways, it represents a return to first principles. Why? The core mandate of any family office is to safeguard and grow family capital in accordance with the family’s underlying values, purpose and legacy. By taking back control over decision-making and investing direct, family offices increase their ability to fulfil that mandate.
The bottom line?
Direct investing is fast becoming the clearest expression of what a family office is for. It lets families combine the patience and purpose that make them attractive partners, with the discipline and governance that make them credible ones. Get that balance right, and the rewards go well beyond returns: family offices become the capital of choice for the next generation of ambitious companies, and a source of pride and continuity for the next generation of the family itself.
The opportunity is real, but it isn't automatic. It belongs to the family offices willing to professionalise, build the right networks, and trust their people to act on them. For those that do, the future of family office investing won't be something that happens to them — it will be something they shape, on their own terms.
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