Single-Family Offices - What Do They Own?
The author of this piece, who has access to a comprehensive database of what SFOs invest in, points to a number of eye-catching examples.
The following article comes from Alastair Graham, founder and managing director of Highworth Research, an organisation tracking many of the world’s single-family offices. This group provides highly detailed analyses of family office activities and investment patterns.
In the following analysis, Graham examines the sectors family offices are investing in and the associated trends. Again, this is the kind of exceptional insight one cannot get elsewhere.
The Family Offices Database produced by Highworth Research in association with WealthBriefing now includes detailed profiles of 1,500 single family offices globally. The online database provides one of the most comprehensive sources available for understanding the statistics behind single family offices’ allocation to particular asset classes.
Out of the 1,500 family offices currently on the Family Office Database, 1,426 allocate to alternatives. Among the major alternatives, the most popular not surprisingly is real estate, with 1,090 SFOs allocating to this asset.
After real estate the next most popular alternatives are venture capital and private equity, with 755 of the 1,500 SFOs investing in VC, of which 608 invest directly, 540 through funds, and most through both.
The Family Office Database also shows that 660 SFOs invest in private equity, of which 452 invest directly, 440 through funds, and most through both.
Which are the top dozen most favoured business sectors in which single family offices invest directly via venture capital and private equity?
Technology and healthcare lead the way
Here is the ranking of single family offices’ preferred business sectors, drawn from the direct VC and PE investment histories of the 1,500 SFOs on the Highworth Database.
Technology – all categories: 566;
Healthcare – all categories: 334;
Financial services, including fintech: 238;
Diverse – multi-sector: 214;
Real estate: 212;
Consumer products: 190;
Food and beverage: 181;
Consumer services: 130; and
If we drill down into the numbers of SFOs investing via PE or VC into some of the fashionable niche sectors, here are the stats, again drawn from the base of 1,500 SFOs:
Renewable energy: 115;
Sports business: 71;
Environmental protection: 58;
Artificial intelligence: 49;
Logistics: 48; and
Are the sectors currently favoured by single family offices for their PE and VC investments likely to change much in the next couple of years? Post pandemic, technology and healthcare are likely to continue leading the pack for the foreseeable future. Possibly hospitality will reduce in appeal, again as a result of the pandemic.