Family offices see more tailored products, leverage ‘collective firepower’ for direct deal access
Family offices look out for opportunities that fit a ‘3L’ framework of lifestyle, legacy and liquidity
[SINGAPORE] More products in the market are being structured for the needs of family offices which are becoming more institutionalised, industry leaders said at The Cercle: Future of Finance, Singapore Family Office Forum on Tuesday (Oct 6).
Held at The Fullerton Hotel, the closed-door forum organised by The Cercle, an invitation-only private capital investment club gathered 60 family office principals, sovereign allocators, and institutional leaders.
Various companies, such as Agentic Funds, an artificial intelligence-driven quantitative hedge fund; BTC Now, a Bitcoin structured products platform; and Pogum, a bilateral lending platform, are increasingly tailoring solutions to the needs of family offices.
Sam Chowdhury, founder and chief investment officer of Agentic Funds, noted that family offices look out for opportunities that fit a “3L” framework: lifestyle, legacy and liquidity, where his fund is structured to fit the different needs.
He noted that family offices often have two segments; the patriarch and the next generation that have different aims.
The patriarch often aims for capital preservation, liquidity and no management fee, while the next generation focuses on real exposure to AI, not just a stake in AI start-ups.
Capital preservation is key
Unlike conventional venture capital or private equity funds driven primarily by target internal rates of return (IRR), family offices usually operate under a strict capital preservation mandate.
A fifth-generation principal from a Dubai-based family office outlined a rigorous three-step filter for deal selection: “Why should we not do it, should we do it, and lastly, how much?”
Co-investing with peers provides vital reassurance by distributing risk, he said, noting that historically, wealth erosion in family offices often stems from real estate misallocation, disputes over wealth division among heirs, and complex cross-border tax liabilities, seen from his own family office.
Tax complexity is especially acute for global families; his family office encompasses 100 members spanning nine nationalities and 22 residency jurisdictions.
This, he noted, has led the family office to constantly having to adapt based on changing trust regulations and ultimate beneficial owner (UBO) disclosure rules.
Sourcing bottlenecks and alignment with general partners
Despite increased interest in private markets, those at the forum emphasised that direct deal sourcing still remains highly fragmented and time-consuming.
An investment lead at a US-based family office noted that sourcing deals in the secondary market remains particularly slow, forcing her team to build dedicated networks with general partners (GPs) to secure a direct pipeline.
Deal-sourcing approaches also vary significantly by geography.
A principal noted that in general, Chinese investors traditionally prefer sourcing deals independently.
However, he noted that partnering with GPs has become essential for navigating complex cross-border tech investments effectively.
Quality control also remains a hurdle, where one family office adviser cautioned that many direct deal proposals end up being a “waste of time” due to counterparty risks and unverified buyers.
To speed up the process, a Hong Kong-based family office adviser said that it has used an AI platform. This has helped cut the timeline to decide on whether to invest in a deal from two weeks to between three and five days.
The platform has also allowed the whole investment team to provide live comments on the analysis and information, speeding up the assessment and decision process.
Co-investing as a community
As family offices become more institutionalised, the community is also coming together and seeking for deals once only available to institutions, by providing a combined pool of funds.
“We are taking the behaviour of co-investing within the family office world, and applying that to frontier technologies,” said Noelle Reno, founder of The Cercle and the organiser of the event.
“We look to family office principles that are native to these technologies to take signals from, to share their allocations, and to help other family offices and their due diligence and underwriting,” she said.
This would combine “collective firepower” and allow family offices to negotiate directly with target companies, Reno noted.
