Bridging capital and investment opportunities
Most investors are particularly discrete, in particular high net worth investors such as family offices. However with a great amount of investable capital, these organisations are often looking for ways to diversify their portfolio investments.
Over the years Singularis Advisors has tracked the investment trends of this investor group; while stocks, bonds and real estate is their bread and butter, it is now clear that the interest for alternative investments is strong. The form through which these investments materialise can be in very different ways, the most common being fund investments, direct equity investment, co-investment and club deals.
Given the entrepreneurial background of the majority of the family office wealth, a majority already have exposure to direct or co-investments. Recent investments can in many cases be interpreted as a reaction from investors that have lost money on the volatile stock markets after trusting other people with a large part of their assets. Therefore the element of “taking control” of the situation has come into the picture, leading to a scenario where these organisations prefer to take larger stakes in investee companies. This has also proven to be a benefit for the company that receive the investment as it simultaneously receives hands-on strategic guidance from best of breed entrepreneurs. Close to all family offices are founded around entrepreneurs and the industry experience and knowledge is the sources of their wealth, which makes them a good fit for direct investments and sector specific private equity vehicles.
There is not a standard pattern, all investors have their own decision-making process, investment strategy, values, missions and passions – they are all Singular.
Therefore, from a capital raising perspective, it takes time to develop new contacts and quick results are not guaranteed, even with a qualitative approach.
The Singularis Advisors team talk with investors on a daily basis and have over the years developed these so very important relationships with investors in the major investor clusters around the world.
What’s in it for the investor?
The Family Office investors are dealmakers and as we know one of their biggest challenges is the deal flow. As public markets have become more efficient, it is close to impossible to achieve above-market returns on a consistent basis. These investors are therefore constantly on the hunt for the best partners in the private sector to ensure future deal flow and returns. The result of this trend over the last three years has been a quadruple in the activity of family office deal making – they are more active then ever.