Family Office Investors: Why Direct Deals Need a Different Pitch

Family offices are no longer a niche. Deloitte estimates there are 8,030 single family offices worldwide, up from roughly 6,130 in 2019, and projects 9,030 by 2025 and 10,720 by 2030, a 75% rise on 2019. Together they hold US$3.1 trillion in assets under management, and the families behind them an estimated US$5.5 trillion in wealth. UBS's 2025 report drew on 317 single family offices with an average net worth of USD 2.7 billion. The capital is substantial, and it is increasingly organised.

Geography is uneven. Deloitte counts 3,180 family offices in North America, 2,290 in Asia Pacific and 2,020 in Europe, against 290 in the Middle East, 190 in South America and 60 in Africa. The Middle East is small in number but moving quickly: the Dubai International Financial Centre recorded 1,408 family business-related entities at the end of June 2026, up 36 per cent on the year. The map of family capital is changing, and companies that treat it as a single market will misread it.

For a company seeking capital, more family offices does not mean easier access. It means more variety and more noise. Each office has its own mandate, family history and risk appetite, and principals are approached constantly. The chief executive's challenge is not finding a list of names, which is simple, but understanding which five or six are plausible partners and why. A generic pitch to a hundred offices is likely to produce silence. A considered approach to ten, with a reason for each, is likely to produce conversations.

Build the target list in three layers. First, region and mandate: where the office invests, what stage and sector it has backed, and whether it invests directly. Second, the family's source of wealth: operating-business families tend to back sectors they understand. Third, a route in: a mutual connection, an adviser both sides trust, or a co-investor. Write one paragraph per target explaining why you are relevant to them. If you cannot write it, remove the name from the list.

A word on definitions. Single family offices serve one family; multi-family offices serve several; and many families use a mix of private bank, adviser and in-house team without a formal office. Deloitte's figures refer to single family offices, so the true population of family capital is wider than the headline count. For the company seeking funding, the practical implication is that the investor opposite you may be an office, an adviser acting for a family, or the principal personally, and each will decide differently. Ask early who the real decision-maker is.

Direct investing is now common. Citi's 2025 survey of 346 family offices in 45 countries found that 70% were engaged with direct investments, and that four out of ten of those had increased or significantly increased their activity in the last year. Family offices have the capital, the patience and often the operating experience to invest without a fund manager. The appeal is control over selection, lower fees and the possibility of a strategic relationship with the company.

Yet the allocation is cooling. UBS found that the average private equity allocation fell from a peak of 22% in 2023 to 21% in 2024, and that family offices making changes planned to reduce it to 18% in 2025, of which 8% would be direct private equity. Goldman Sachs's 2025 family office survey tells a similar story, with private equity at 21% in 2025 versus 26% in 2023. The pool is large, but the share allocated to private equity is falling.

The message for companies is that demand has not disappeared; it has become discriminating. UBS reports that more than a third (37%) of family offices expect a significant or moderate rise in direct private equity over five years, even as near-term allocations ease. Principals are asking harder questions about returns, liquidity and risk, and are comparing a direct opportunity with public equities, private credit and real estate. A pitch that assumes enthusiasm for the asset class will meet scepticism. A pitch that makes a specific case will not.

Position the opportunity against the alternatives family offices actually hold. Show how the investment compares on expected return, liquidity, time horizon and involvement. Include a realistic exit path, because many direct investors hold longer than funds but still want to know how and when capital returns. Be explicit about what you need beyond money: introductions, expertise, patience. Then ask for a conversation, not a cheque.

Pay attention to the competition for capital. Family offices hold public equities, private credit, real estate and funds alongside direct deals, and they compare them continually. A direct investment in a private company competes with liquid, familiar alternatives. A company that cannot explain why its illiquidity and risk deserve a premium over public markets will find the conversation short, however strong its product. Be prepared to discuss what you would do if the family wanted to sell in year three, and how that would work.

The clearest evidence on what family offices value comes from a survey by Bastiat Partners and Kharis Capital, reported by CNBC: 91% of family offices said the primary criterion is the quality and experience of the management team. Terms, valuation and market size matter, but they follow the judgement about whether the people are credible. In a direct deal the family has no fund manager to rely on. It is underwriting the founder or chief executive personally.

Staffing reinforces this. The 2024 Wharton Family Office Survey found that only half of family offices making direct private investments have private equity professionals on staff, and that only 20% of those doing direct deals take a board seat. Goldman Sachs found that, on average, 70% of family offices' investment needs are managed in-house. Many principals therefore decide with a small team, close advisers and their own instincts, and they rely heavily on what they can observe about the people and the process.

For the pitch, this changes the content and the sequence. The first conversation should answer the question, why should I trust this team, before it answers, why is this a good market. Share your track record candidly, including setbacks and how you handled them. Introduce the people who will do the work, not only the chief executive. Show how decisions are made. Because family offices often lack formal oversight capacity, a clear governance and reporting proposal can reassure rather than constrain.

Prepare a short people-and-process section for the first meeting: who is who, how long they have worked together, how the board operates, what you will report each month and what rights you would give the investor. Offer a site visit, customer references and time with the finance lead. Expect a long period of informal contact before any document is requested. Treat that period as the diligence that matters most.

Avoid the error of treating governance as reassurance for the investor alone. Strong governance protects the company too. A clear shareholder agreement, defined information rights and a calendar for board and investor meetings reduce friction when conditions change. Family offices often want more involvement than a fund would, and a structure that defines how involvement works, from monthly calls to board observer rights, channels that interest productively instead of letting it become informal and intrusive.

Many family offices are the financial arm of an operating family. UBS's 2026 report found that 77% of the families surveyed had an active operating business. Such principals tend to understand customers, supply chains and labour markets in their own sector, and they often prefer opportunities adjacent to what they know. They may be potential customers, distribution partners or strategic collaborators as well as investors, which can add value beyond capital and complicate the relationship if roles are not clear.

There is a counterweight. The survey reported by CNBC found that only 12% of family offices said they invested in other family-owned companies, so common ownership structure alone does not create preference. Relevance and trust matter more. Regional patterns also differ. UBS found private equity represented 27% of portfolios for US family offices and for European family offices outside Switzerland, but 17% in Latin America, 16% in Switzerland and 11% in Southeast Asia. Goldman Sachs found the largest private equity allocation in the Americas at 25%, versus 22% in EMEA and 15% in APAC.

For a company, research into the family is not optional. Know the source of wealth, the sectors the family has invested in, whether its operating business could be a customer or a competitor, and the regional norms that apply. A mismatch is easy to detect: a pitch for a software business to a property family with no technology interest wastes both parties' time. A match is just as visible. A clear adjacency, backed by a specific proposal for how the family's operating experience would help, can move quickly.

Make an adjacency map for each target. List the family's operating businesses, past investments and public statements. Identify one way your company could help the family business, such as a service, a data source or a distribution route, and one way the family could help you. Propose a partnership that includes both. This moves the conversation from please fund us to here is something we could build together, which is how family offices prefer to invest.

Consider also what the family cannot do for you. An operating family may be a customer of your competitor, a supplier to your rival or a source of conflict with another investor. Disclosing such relationships early is a sign of integrity. It also lets both sides decide whether the structure can accommodate them, for example through information barriers or clear commercial terms. Surprises discovered in diligence rarely help, whereas conflicts disclosed and managed from the start often become the basis of a stronger relationship.

Family offices are subject to the same generational forces as the businesses they back. UBS found that just over half (53%) of family offices globally have wealth succession plans, and its 2026 report found that only 35% have a defined succession plan for the family office itself. Decision-makers change. The principal who liked your pitch may hand responsibility to a daughter or a professional chief investment officer, and the next generation may have different priorities, from technology to sustainability.

This affects deal structure. A family office with unresolved succession may prefer shorter horizons, a clear liquidity path or a minority position that does not require long-term commitment from the next generation. A younger principal with an active mandate may be keen to build a track record and bring a network. Understanding where the office sits in its own generational cycle helps you read hesitation correctly. It may reflect the family's governance, not a verdict on your company.

For a chief executive, the lesson is to build relationships with more than one person. A deal that depends on a single principal's enthusiasm is vulnerable. Meet the investment lead, the family's adviser and, where appropriate, the next generation. Ask how decisions are made, who must approve, and what would cause the family to revisit a commitment. Investors who answer openly are signalling that they will be predictable partners; those who avoid the question are telling you something as well.

Add a decision-process question to every first call: who else will want to be comfortable before this goes ahead, and what will they need from us? Record the names and the answers. Offer to brief each stakeholder in the form they prefer. Where the family has a formal investment committee, ask for its calendar and plan your timetable around it. Respect for the family's process is itself part of the pitch.

Pay attention to the language of legacy. Family principals often think in terms of long-term stewardship, reputation and the values they wish to be associated with. A company whose mission, culture and conduct match those values can be more attractive than one offering marginally better returns. That does not mean flattering the investor. It means being clear about what you stand for, since an investor who shares those aims is more likely to stay patient when performance dips and to protect your reputation as well as your balance sheet.

The Middle East is a small but fast-growing part of the family-office map. Deloitte counts 290 family offices in the region, and the DIFC recorded 1,408 family business-related entities at the end of June 2026, up 36 per cent on the year. UBS found Middle East family-office portfolios evenly split between alternative and traditional asset classes (50%), which suggests meaningful appetite for private markets. Hubs such as Dubai combine regulatory frameworks with dense networks of advisers, operators and investors.

Asia Pacific is larger. Deloitte counts 2,290 family offices there, more than Europe's 2,020, though UBS found Southeast Asian portfolios hold 11% in private equity, lower than in the US and Europe. Introductions through trusted intermediaries are likely to carry more weight than cold approaches in both regions, and decisions may involve a wider family council. Visible, patient relationship-building, including regular visits, is often a precondition for serious discussion.

For a UK or European company seeking Gulf or Asian family capital, the practical conclusion is to invest in local presence and local credibility. That may mean a trusted adviser on the ground, a co-investor already known to the family, or a physical presence for a period. It also means respecting differences in timing and protocol. Meetings may be rescheduled, decisions may be taken in family settings rather than offices, and relationships continue through the year, not only at fundraising moments.

Regulation matters too. Communications that invite investment may count as financial promotions in the UK, and similar rules apply in other jurisdictions. Work with an FCA-authorised firm or a locally regulated adviser before sending investment material to family offices or individuals. Karter McKinley supports the process, from target research to meeting preparation, but does not provide regulated advice or promote investments itself. Compliance should be a design input to the approach, not a retrofit.

Tax and regulation also shape where and how family offices invest. Residency rules, hub incentives and the choice between onshore and offshore vehicles affect where a family bases its office and which structures it prefers. For the company, the lesson is to ask early about the investing entity, the jurisdiction and any restrictions that may affect the deal. A willingness to accommodate reasonable structuring requests, within the law and with proper advice, can separate a deal that closes from one that stalls.

Put the pieces together and the shape of an effective approach is clear. It starts with a warm introduction and a short note explaining relevance. It moves to a first conversation focused on people and fit. It continues through informal contact, a more detailed discussion of the opportunity and a joint view of how the relationship would work. Only then does it reach documents. The sequence is longer than a typical fund process, but each stage reduces uncertainty for the family and for you.

Materials should be fewer and clearer than for a fund. A concise memorandum of a few pages is more useful than a long deck: the business, the people, the opportunity, the use of funds, the risks, the proposed terms and what you would want from the investor beyond capital. Include the downside case. Family offices have often seen what goes wrong, and presenting risks honestly demonstrates the judgement they are underwriting. Keep data-room access staged and responsive.

The chief executive should plan this as a campaign with a limited number of targets and an owner for each. A capital raise that treats family offices as an extra line on the investor list will underperform. One that treats the relationship as strategic can produce an investor who opens doors, shares expertise and is patient in difficult periods, which can be worth more than the headline valuation. The upside is relational as much as financial.

Next steps: build the ten-name target list with adjacency maps; draft the one-page relevance note and the short memorandum; line up two or three warm introductions; and agree internally who leads each relationship. Seek regulatory advice on how, and to whom, you can communicate. Then begin conversations, learn from the first five and adjust. Keep a record of the questions you are asked, since they show what family offices actually need to hear.

Measure the campaign. Track the number of tailored approaches, the share that lead to a first meeting, the share that lead to a second, and the time between them. After ten approaches you will see which messages and routes work. Share the findings with the board so that expectations stay realistic: a relationship-led process produces fewer, deeper conversations than a fund raise, and a small number of aligned family investors can be worth more than a long list of cautious ones.

Karter McKinley's Capital Raising work helps companies research family-office targets, build adjacency maps, prepare a concise investor memorandum and plan an approach that fits each family. We support the process alongside FCA-authorised firms where regulated activity is involved, and we do not provide investment advice or promise outcomes.