Alt Investments

European Family Offices's VC Investment - It's Bigger Than You Think

Alastair Graham, 6 February 2020

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SFOs outside the US
In all countries outside the US where single family offices are represented on the Highworth-WealthBriefing Database, a total currently of 866 SFOs, 329 SFOs or 38 per cent, invest in venture capital. VC investment has become more popular among single family offices for good reasons, and for young private companies seeking funding in their early stages of life, a financing relationship with a family office has a compelling logic.

Family offices offer young companies the benefit of patient capital, often with no required exit date. Long-term, illiquid investment is well suited to family offices. Additionally, SFOs often offer faster decision-making, with short lines of communication and little bureaucracy. They are often able to bring valuable advice on growth strategy based on their own experience of significant success in the same business sector, and their knowledge of key sales channels and influential contacts.

Many family offices find their own deals based on their knowledge of particular industries, but many others need to go through funds to access deal flow, to delegate the often tricky due diligence process, and to provide diversification of risk through gaining access to investment opportunities in multiple sectors.

Healthcare and digital technology are favourites
Looking at the single family offices which invest in VC on the database, young companies in healthcare and in technology are favourite targets. Here are some of the larger single family offices in the EMEA region which are willing to commit significant amounts of capital to VC:

Examples
Arkin Holdings, Israel, is the family office of Israeli billionaire Mori Arkin who made his fortune as a manufacturer of generic pharmaceuticals. He invests in early and mid-stage companies in a number of critical therapeutic fields and medical technology companies, mostly in Israel. Total AuM is between $500 million and $1 billion.

Waypoint Capital, Switzerland, is the family office of Ernesto Bertarelli and his sister Donata, with AuM in excess of $15 billion. They undertake their VC investments in life sciences through the affiliates Gurnet Point Capital in the US and in technology through Forestay Capital in Geneva. 

Djursholm Invest, Sweden, is one of seven family offices belonging to the Persson family who made their fortune from the H&M chain of fashion stores. Djursholm invests in numerous early stage companies in the digital tech sector. Total AuM is estimated to be $1 billion to $2.5 billion

Freelands Family investment Group, UK, is the family office of Elisabeth Murdoch, one of Rupert Murdoch’s six children. Freelands’ VC investments are not surprisingly directed at the digital media sector. Total AuM is $100 million to $500 million

NXC Corporation, Belgium, is the family investment company of South Korean video games magnate Kim Jungju, which is oddly based in Belgium due to the belief that there are significant investment opportunities in Europe. Although Kim’s private equity investment is principally in Europe, his VC investments are mostly in digital tech in South Korea. Total AuM is over $7.7 billion.

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