Raising capital from family offices
Do family offices co-invest alongside other investors?
Short answer
Yes, many family offices invest alongside other investors, and they often feel more comfortable when another respected investor is already in the deal. In my experience, most ultra-wealthy single family offices prefer direct deals to blind pools. That makes a shared deal a natural fit. Many sponsors talk to a securities attorney about how to structure a shared deal.
Why families like to invest next to each other
Yes, co-investing is common in the family office world. Many families would rather join a deal with others than carry the whole check alone. It spreads the risk and gives them peers to compare notes with.
Trust drives most of it. When I talk about raising capital from family offices, I point out that they look at who else is in before they decide. A familiar name in the deal can help with trust.
"Family offices follow other family offices, ultra wealthy investors follow other ultra wealthy investors, and get more comfortable based on others investing."
I would add that this can go too far. I said in the video that it often happens almost to a fault. If you are raising money, you can use that habit in an honest way. You do not need to invent it.
Start with one anchor and let the smaller checks follow
The practical version of co-investing is the anchor investor. If you bring in one investor at half a million dollars, the 50 thousand and 100 thousand dollar checks often follow. Those smaller investors see that someone serious already did the work.
Some sponsors explore different terms by check size. Larger investors might pay lower fees than smaller ones. That gives the anchor a reason to move first and helps your momentum.
This clip walks through how an anchor investor and different terms by check size can build momentum.
Summary and key takeaways from this video
Direct deals make co-investing easier than blind pools
Co-investing works best when the family can see the specific deal. In my experience, 60 to 80 percent of ultra-wealthy single family offices prefer to go direct. Some still like a fund, and many hold a few funds they got through a private banker or wealth platform. For the investments they source themselves, they usually feel more comfortable going direct.
Institutional investors are the opposite. I have seen about 80 percent of them prefer a fund. So the type of investor you are talking to changes what you should offer.
Here I answer a question about joint venture deals versus blind pool funds and why established sponsors should offer both.
Summary and key takeaways from this video
There is one more angle. A family office that likes a fund may also want the option to double down on its favorite deal in the portfolio. In a Hot Seat webinar I said you could let people do two direct investments with you before they have to come through the fund. The trend I see is fewer blind pools and more direct deals.
This session covers fund versus direct appetite and the option to double down on a favorite deal.
Summary and key takeaways from this video
What to keep in mind before you invite co-investors
Not every family office co-invests, and not every one wants the same role. Some want control, some want a passive spot, and some only look at deals in the industry where they made their money. Find the ones close to your industry and your asset. They will understand your deal faster.
Rules for how you offer and market a deal matter too. Talk to securities counsel before you reach out to a group of co-investors. I am not giving legal advice here.
From my books and event talks
One thing I would add is that co-investors should never skip their own work just because someone else is in the deal. Family offices should always do their own formal due diligence, even when the lead is a good friend or someone they know well. Seeing a respected name next to yours is a helpful signal, but it is not a substitute for checking the numbers and the sponsor yourself. If you are raising, welcome that diligence and make it easy, because it builds the trust that brings the next investor in.
"They should always do their own formal due diligence, even if it's a, you know, good friend or someone they know well. But family offices are some of the smartest money out there as well. So I wouldn't just think, oh, we go to family offices because institutions will never invest in this. It doesn't have any track record."
On the record
- I have seen 60 to 80 percent of ultra-wealthy single family offices prefer to invest directly in deals instead of a fund.
- An anchor investor at half a million dollars can bring in follow-on checks of 50 thousand and 100 thousand dollars.
- Institutional investors tend to flip the direct versus fund ratio, with roughly 80 percent preferring a fund.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Ultra-Wealthy Investor Q&A Webinar, Raising Capital from Single Family Offices & Ultra-Wealthy Investors, Family Office Club Hot Seat Webinar Featuring Live Strategy Sessions with Investors & Founders. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around offering documents, investor eligibility rules and co-investor fee terms. Do not use AI to write your own legal agreements.
Your next steps
- Decide whether your deal fits direct co-investment, a fund, or both.
- Look for one anchor investor close to your industry or asset.
- Think through terms by check size, such as lower fees for larger checks.
- Build a list of family offices in your industry and region.
- Consider talking with a securities attorney about your offering and outreach.
People also ask
Do family offices prefer direct deals or funds?
In my experience, 60 to 80 percent of ultra-wealthy single family offices prefer to go direct. Institutional investors lean the other way, with about 80 percent preferring a fund.
How big should an anchor investment be?
I used half a million dollars as an example, with 50 thousand and 100 thousand dollar checks following it. The right size depends on your raise and your deal.
Should I offer different terms to different investors?
I have seen sponsors charge less to investors who write much larger checks. Many sponsors talk to a securities attorney about differences in terms.
Related questions
- How long does a family office take to make a decision?There is no standard timeline, and I would not trust anyone who gives you one number.
- What is the difference between single and multi-family offices?A single family office works for one family and is built the way that family wants.
- Do family offices invest in funds or only direct deals?Family offices do both.
- How do I find the decision maker at a family office?Start by meeting the family through advisors, events and the people who manage their investments.
Work through it with the family office fit check. See all raising capital from family offices resources.