The traditional narrative around single-family offices has long positioned them as sophisticated capital allocators—wealthy families deploying their substantial assets across diversified portfolios managed by external fund managers and investment advisors. However, a fundamental shift is reshaping this landscape. Today, 83% of single-family offices worldwide are expected to make direct investments in 2024, a significant increase from 73% in 2023, signalling a dramatic evolution from passive allocation to active capital formation.
This transformation reflects a growing sophistication among family offices, driven by strategic imperatives. With SFOs not only demonstrating a growing appetite for direct and co-investment opportunities, they are also actively leading transactions, creating bespoke financial products, and even fundraising from their peers.
The private markets pivot
The family office investment landscape in 2024 and 2025 is marked by a decisive shift toward private markets. This allocation shift represents more than a simple rebalancing; it signals family offices’ growing confidence in their ability to source, structure, and lead complex transactions.
Private equity accounts for 30% of the average family office portfolio, up from 22% in 2021. Conversely, public equities accounted for 25%, down from 34% in 2021. This dramatic reallocation underscores how family offices are moving beyond traditional “product pusher” relationships toward more independent, value-driven investment strategies.
The drivers behind this shift are multifaceted. Family offices possess patient capital with extended investment horizons, allowing them to pursue opportunities that institutional investors, constrained by shorter liquidity requirements, might bypass. Additionally, many family office principals bring decades of operational and sector-specific expertise, creating natural advantages in direct investment scenarios.
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The co-investment imperative
Perhaps nowhere is this evolution more evident than in the growing appetite for co-investment partnerships. Data indicates that about 42% of family offices (that allocate capital directly) are co-investing alongside other family offices, venture capital, private equity and real estate investors. However, family offices demonstrate a marked preference for partnering with other SFOs rather than institutional investors.
This preference stems from fundamental alignment differences. When institutional investors participate in family office-led deals, their substantial “mega tickets” can effectively transform the family office from a lead investor into what resembles an employee-type relationship. The institutional investor’s scale and requirements begin driving investment decisions, diluting the family office’s strategic control and potentially misaligning investment approaches.
In contrast, family office-to-family office partnerships operate on equal footing. Both parties bring substantial skin in the game, share similar long-term orientations, and often possess complementary expertise. These partnerships mean in practice that “private wealth meets private wealth”—collaborations built on shared values, aligned timelines, and mutual respect for each partner’s contributions beyond just capital.
Creating specialised investment vehicles
The sophistication of modern family offices extends to their ability to create bespoke investment products when market offerings fail to meet their specific requirements. This capability represents a significant departure from traditional asset allocation models, where family offices would seek existing funds or products to match their investment thesis.
Today’s family offices are launching their own funds, funds of funds, and specialised investment vehicles tailored to their unique requirements. These vehicles serve multiple strategic purposes: they enable the family office to maintain investment leadership, provide platforms for co-investor participation, and create vehicles that align precisely with the family’s values, risk tolerance, and return expectations.
Family offices are increasingly comfortable leveraging this scale to drive investment outcomes rather than simply participating in opportunities created by others.
The economics of family office leadership
The financial dynamics of family office-led investments differ markedly from traditional institutional fund structures. Family offices typically offer more attractive fee arrangements to their co-investors, recognising that their value proposition extends beyond pure financial returns. Compared to traditional fund investing, co-investments typically carry lower fees and a potentially more predictable risk-return profile, both attractive attributes in times of market dislocation.
In many cases, family office general partners provide co-investment rights to their limited partners without additional fees—a structure rarely seen in institutional fund management. When family offices pursue direct deals, fees are often limited to actual expenses for legal, accounting, and advisory services, plus carried interest contingent on successful outcomes. This alignment creates more efficient capital deployment and stronger incentive structures for all participants.
The specialised ecosystem
The evolution of family offices as capital raisers has created demand for specialised service providers who understand the unique dynamics of family office-to-family office transactions. Traditional capital introduction services, designed for institutional investors, often prove inadequate for the relationship-driven, values-aligned world of family office investing.
Specialised capital introducers like Grammig Advisory, operating within dedicated family office ecosystems, have emerged to address this gap. These professionals create detailed profiles of investment opportunities, lead family offices, and ideal co-investor targets. Their approach recognises that family offices want to understand not just the financial merits of an opportunity, but why they specifically have been approached and how their expertise contributes to investment success.
This targeted approach reflects a crucial understanding: family offices prefer to be recognised for their operational expertise, sector knowledge, and strategic value-add capabilities rather than being approached solely based on their wealth. The most successful capital introduction efforts emphasise the family office’s potential contributions beyond capital, creating partnerships built on mutual value creation rather than simple financial participation.
Reshaping market dynamics
Family offices are emerging as viable alternatives for capital as other investment sources (institutional) have been constrained, resulting from persistently high interest rates and market uncertainty. This positioning creates opportunities for family offices to lead transactions that might otherwise struggle to find adequate capitalisation.
The patient capital advantage becomes particularly pronounced during market volatility. While institutional investors may face redemption pressures or mandate restrictions during uncertain periods, family offices can maintain consistent investment approaches. This stability positions them as preferred partners for sponsors seeking reliable, long-term capital partners.
Many general partners (GPs) consider co-investments a way to unlock new capital when fundraising is slow. These deals may also help them strengthen relationships with limited partners (LPs), particularly in the mid-market space. Family offices are increasingly filling these gaps, providing GP partners with reliable capital sources while gaining access to unique deal flow.
Governance and institutionalisation
Recent data shows that 40% of the largest single-family offices are now making decisions through a formal governance structure. This institutionalisation reflects the growing sophistication of family office operations and their evolution from informal wealth management structures to professional investment organisations.
The adoption of formal governance structures enables family offices to pursue more complex transactions, engage in institutional-quality due diligence processes, and provide the transparency and accountability that co-investors and transaction partners expect. This professionalisation creates credibility that supports the family office’s ability to lead larger, more complex transactions.
However, this institutionalisation doesn’t diminish the fundamental advantages that distinguish family offices from traditional institutional investors. The governance structures support more efficient decision-making while preserving the alignment, patient capital approach, and value-driven investment philosophy that makes family offices attractive partners.
Future implications
An ever-growing number of family offices suggests that their influence in private markets will continue expanding.
The increasing sophistication of family offices, combined with their growing numbers and assets under management, positions them to become dominant forces in private market transactions. Their ability to operate as both capital allocators and capital raisers creates unique competitive advantages in deal sourcing, structuring, and execution.
As family offices continue maturing their investment capabilities, we can expect to see further innovation in fund structures, co-investment platforms, and transaction leadership models. The traditional boundaries between capital allocators and capital providers are blurring, creating a more dynamic and diverse private markets ecosystem.
Conclusion
The evolution of single-family offices from passive capital allocators to active capital raisers represents one of the most significant structural changes in private markets today. This transformation reflects not just growing wealth concentration, but increasing sophistication, strategic thinking, and collaborative capability among the world’s wealthiest families.
Family offices are proving that effective capital formation extends beyond simple financial capacity. Their combination of patient capital, operational expertise, aligned incentives, and collaborative approach creates unique value propositions for co-investors and transaction partners. As this trend continues, family offices will likely play increasingly central roles in shaping private market dynamics, creating new standards for partnership, alignment, and value creation.
For fund managers, sponsors, and other market participants, understanding and adapting to this evolution isn’t optional—it’s essential for accessing one of the most important and fastest-growing sources of investment capital in today’s markets. The future belongs to those who recognise family offices not just as sources of capital, but as sophisticated partners capable of leading, structuring, and driving successful investment outcomes.
