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Alternative Market Briefing

US family offices miss out on private equity opportunities

Tuesday, August 28, 2018

Bailey McCann, Opalesque New York:

A new study of family offices from Shroder Adveq shows that US family offices are investing in private equity, but are missing smaller opportunities as well as opportunities outside of their home market.

"Large buyouts clearly command the most attention, but this leads investors to think this is the preferred or even safest place to find attractive opportunities," said Ethan Vogelhut, Head of Buyout Investments, Americas at Shroder Adveq. "However, in reality, smaller deals make up the vast majority of the opportunity set for investors, but only 25% of capital goes into these types of deals, offering savvy investors access to an often-untapped and less efficient segment of the market."

According to the study, family offices are also failing to recognize private equity opportunities in emerging markets and in Europe, with only 5% and 6%, respectively, citing these regions as having the most opportunity over the next year. Instead respondents showed a large home-bias towards investing in the U.S. with 75% citing the U.S. as having the most opportunity.

When it comes to expanding the opportunity set, family offices have started to take a closer look at the smaller end of the market in the US. Respondents cited greater buy-and-build opportunities and lower purchase prices as the top two reasons for looking at the middle market.

There are more concerns when it comes to looking at global opportunities however. Most respondents......................

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