How to attract Family Office capital

[Published on March 28th 2023]

Each family office is unique and you can get better economics from a Family office compared to PE. In this video, Azhar Quader, Investor, Queens Court Capital Management and Kevin M. Meyers, Managing Partner, First Haven Capital discuss how to successfully create a long-term partnership with Family Offices.

Finding the right family networks and resources

Both Azhar and Kevin agree that family offices have different investment strategies and that there is no one-size-fits-all approach to raising capital from them. Kevin suggests that one of the key points that attracts family offices to independent sponsors is that there is no such thing as an overstaffed family office. If you're looking for deals and you don't have a big team, the best way is to partner with folks who are really good at it. 

Azhar’s firm, Queen’s Court Capital has invested $100 million in the last few years across just under ten platforms. Almost all of the capital has come from family offices. He states that family offices have different strategies and there has been a big rush in the last 5 - 10 years for family offices to go direct and have exposure to deals. There are also passive family offices that can move quickly, but can be a nuisance in subsequent years. Institutional quality family offices that give private equity firm economics and are more of a one-stop solution.

It's essential for family offices to understand the questions and background of families to ensure a good fit, as some may pull out of deals for reasons that could have been addressed at the beginning. To find the right families, there are different groups like Metcircle, Family Office Exchange, and Fidelity Family Office Organization that could provide access to different family networks. Networking with other family offices can also help in finding the right groups and resources that they may bring to bear.

Selecting the right investors

Existing investors anchored purchase of debt, but additional capital needed for debtors in possession loan and working capital. Raised capital through referrals from families, resulting in $70 million in cost reductions and profitability. Dividend recap returned 107% of investors' money. These examples demonstrate the importance of having the right network and relationships to access capital.

When selecting investors, the sponsor should consider their desired level of control and governance. Smaller checks have better economics but come with a hassle factor. Consider using brokers or additional help to drive better fees, but larger, more sophisticated investors may push for more governance.

Family offices can be categorized as either in the MOIC business or in the wealth preservation business. QSBS (Qualified Small Business Stock) designation Section Twelve can be very tax advantageous for private investors in independent sponsor deals. Where the family office has sourced their wealth can be an indicator of the types of deals they prefer to do, whether they do small or big checks.

Finally, family offices tend to be more steady with their investment activity, and they don't have a rigid asset allocation or way of thinking about where their pockets are. Retired executives and private equity partners are also good partners due to their operating view and access to capital.

Final Thoughts

In conclusion, independent sponsors and capital providers need to be aware of the changing dynamics of the family office and high net worth investor landscape. To be successful, they need to have a clear message and understanding of value creation, network effectively, and select investors with the right level of control and governance. With the right approach, there are ample opportunities to access capital and create value for investors.


iGlobal Forum Events

iscp club image-1

Join the Independent Sponsor & Capital Provider (ISCP) Club today

Building on iGlobal Forum’s long-standing success of connecting and matching over 1,000+ Independent Sponsors & Capital Providers since 2015, the mission of the ISCP Club is to unite all independent sponsors and capital providers into an exclusive community with access to industry content, an Independent Sponsor & Capital Provider Directory and live senior-level deal-making events.

Learn More

Related Blog Articles

Q&A Spotlight: Nick Russell of Tuckerman Capital

We sat down with Nick Russell, Managing Partner of Tuckerman Capital, to explore key issues like future middle-mark...
Read More

6 Ways Independent Sponsors Can Help Institutional Private Equity Funds Expand Reach & Diversify

Institutional private equity funds wield substantial resources and expertise in navigating complex investment lands...
Read More

Q&A Spotlight: Andy Silverman of Parkway Capital

In this speaker Q&A session with Andy Silverman of Parkway Capital, we explore the cutting-edge innovations tha...
Read More

Specialization & Creativity: How Independent Sponsors Are Disrupting Private Equity

The independent sponsor market is exploding, with more individuals launching firms, sophisticated strategies, and c...
Read More

We connect people better through our Brand Promise:

At iGlobal Forum we deliver tangible and measurable outcomes that directly contribute to the success and growth of clients. With our commitment to excellence backed by our Risk-Free policy, we guarantee your satisfaction.

Copyright @2023. All right reserved

Our Location

6 East 43rd St
19th Floor
New York, NY 10017

Tel: (212) 752-7760