Family offices are no longer content to sit on the sidelines of the capital markets. Once seen primarily as quiet custodians of generational wealth, these entities are now stepping up as influential dealmakers—especially in the mergers and acquisitions space.
While many business owners still expect to sell to private equity firms or corporate buyers, a growing number are discovering a third option: family offices. These investors are becoming serious contenders, offering a compelling alternative marked by speed, flexibility and a long-term mindset.
Entrepreneurial DNA and Strategic Intent
What’s driving this shift? One key factor is that around 80% of family offices continue to draw their wealth from operating businesses. These aren’t passive investors—they’re business builders by nature. It’s no surprise they’re gravitating toward direct ownership opportunities, preferring value creation through hands-on involvement rather than passive portfolio holdings.
While family businesses are well-recognised for their economic footprint—generating over 70% of global GDP—the growing role of family offices as M&A participants is only just gaining attention.
A Rising Share of the Deal Market
Despite their traditionally discreet nature, disclosed family office transactions represented 10% of global deal activity in 2021, according to PwC—totalling $227.6 billion, a remarkable rise from just $36.4 billion a decade prior.
A 2022 study from PwC and Family Capital mapped how 5,200 family offices are investing directly across regions. The picture is nuanced: U.S. and European family offices typically invest close to home, while those in Asia and the Middle East often cast a wider net—although rising geopolitical tension may be prompting a shift toward regional focus.
Why Sellers Are Taking Notice
Family offices bring several strategic advantages to the table:
- Speed and Agility: They can move faster than institutional investors, unburdened by fund structures and regulatory red tape.
- Flexible Structuring: Deals can be tailored to meet a seller’s unique needs.
- Long-Term Capital: Family offices often invest with generational horizons, not short-term exit mandates.
- Beyond Financial ROI: Non-financial motives—such as legacy building or preparing the next generation—often influence their decision-making.
That said, as Rothschild’s Chris Hawley notes, not all family offices are equally nimble. Operational readiness still varies widely.
Club Deals and Co-Investing on the Rise
Direct investments can be resource-intensive, requiring in-house or outsourced legal, tax and operational expertise. As a result, many family offices prefer to invest alongside others. So-called ‘club’ deals now make up one-third of all family office deal activity, compared to just 4% ten years ago.
Co-investing, often done in tandem with a private equity firm but outside of its fund structure, is another popular route. It offers access to top-tier deals while lowering fees and leveraging professional infrastructure—though at the cost of some control.
More than 40% of family offices globally co-invest regularly, highlighting this model’s growing appeal.
What This Means for Founders and Funds
Entrepreneurs and investment firms planning an exit should increasingly consider family offices as serious buyers. But alignment is key: many family offices prefer to be active owners, which may not suit founders looking for hands-off capital.
Where values and timelines align, family offices can be highly strategic partners, offering capital, experience and continuity that other buyers may not.
