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By Opalesque: Family offices (FOs) are rapidly evolving from passive wealth preservation vehicles into sophisticated private market operators, increasingly behaving like lean alternative asset managers. But as they do so, there are taking on more operational risks.
Data from Preqin shows family offices' participation in private markets has risen by more than 500% in under a decade, overtaking other institutional channels as wealthy families go into private credit, infrastructure and direct deals. Surveys from global banks suggest alternatives can now account for 40-60% of many FO portfolios, with private equity, real assets and hedge funds doing much of the heavy lifting. Furthermore, reports from UBS, Goldman Sachs and specialist law firms all point to the same trend: family offices are professionalising, building in house investment teams and structuring their own funds to centralise governance, reporting and incentives.
FOs are using hedge funds as core portfolio tools for diversification, downside protection and opportunistic risk-taking according to asset management technology specialist TrussEdge. As a result, we are seeing more ecosystems of family offices and hedge funds co-investing, lending directly, structuring bespoke transactions and taking active governance roles alongside traditional private equ...................... To view our full article Click here
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