If you’re like us, you probably think you know quite a bit about family offices. Read on to see how your beliefs stack up against the findings of our analysis of our family office database.
The database has quickly grown to 376 profiles, so we thought it would be fun to dig into the data to see if we could spot any trends. Following are some of the surprising results.
Not just small deals
To start off, we looked at the deal sizes of most interest. We figured they’d be on the small side. By and large, correct. For family offices that make direct investments, our data show that the company size range of greatest interest is $5 million to $25 million in Ebitda. No fewer than 124, a third, of the family offices in our pool said they targeted companies in that size range. The next most popular size range was less than $5 million in Ebitda, followed by $25 million to $100 million in Ebitda, and $100 million-plus in Ebitda.
Tech is king
With regard to industries, we believed family offices would be enamored with companies in a traditional sector like industrials/manufacturing. They do in fact like industrials, but their favorite sector is technology. (More than 160 of the family offices in our database identified tech as their top sector.) Consumer products/services, business services and healthcare are also top of mind for family offices that make direct investments.
Midsized funds are hot
Family offices that invest in venture and private equity funds aren’t just looking for small, emerging managers. In fact, the fund sizes of most interest are $100 million to $499 million. (Nearly 50 of the family offices in our database identified that range as their sweet spot for funds.) The next most popular fund size was under $100 million, followed closely by funds of $500 million to $999 million. Family offices expressed less interest in funds greater than $1 billion and just a dozen said they were interested in funds larger than $5 billion.