Study: Family offices to grow PE exposure

As the investment funds of wealthy individuals get set to ramp up exposure to private equity, managers have also been seeking more and more capital from family offices, according to studies from Rothstein Kass.

Single family offices are casting their eyes towards private equity and other alternative assets, according to a report published by professional services firm Rothstein Kass.

In the report, around 70 percent of single family office executive directors said they planned to invest in private equity in 2011. Half of the 151 executive directors polled already held private equity investments.

The emergence of family offices as LPs is good news for fund managers who have been forced to contend with traditional LPs like public pension funds pulling back from the asset class, with many investors triaging the manager relationships they have. As more individuals adopt the single family office wealth management model, resources available to the private equity sector have expanded. This burgeoning source of capital presents an untapped market for future fundraising.

“Our latest survey of investment managers finds that they are recognizing the potential of the family office sector and are increasingly seeking to source capital from the sector,” Rothstein Kass private equity group principal Tom Angell said in the report. “Family offices share many characteristics with pension fund investors, and these similarities are actually serving to reinforce the trend.”

The Rothstein Kass report echoes findings from an LPEQ study released last year. The group of European listed private equity groups found that over half of European family offices polled planned to increase exposure to private equity within the next year.