iCapital Network, an online platform allowing qualified investors and their advisors access to a curated selection of private investments, launched an annual report reviewing single-family office investment activities specifically in private equity.
The report, which was based on data collected from 162 single-family offices from around the globe with an average net worth of $918 million, found that a large percentage reported strong performance via private equity investments, especially in contrast to other vehicles and asset classes held in their portfolios.
“In our view, the potential for superior investment returns is the single most influential factor in why private equity is viewed so favorably by single-family office investors these days,” said Lawrence Calcano, Managing Partner of iCapital Network. “And likely the potential opportunity to take more of a hands-on role in managing or supervising a direct investment also adds to the appeal – because in many cases, families can provide valuable insights and leadership drawn from their own experience as business leaders.”
Seventy percent of single-family offices surveyed said that their private equity funds outperformed other investments within their portfolios, and 75 percent said that their direct investments outperformed other holdings.
“Many wealthy families take a longer term investment approach and understand that the premium for illiquidity comes from allowing companies to pursue strategies that often require four to six years to execute as well as additional capital,” said Nick Veronis, Co-Founder and Managing Partner of iCapital Network. “These families also appreciate the active role that fund managers play, working closely with their portfolio companies to achieve their goals – that alignment and consistent engagement typically does not exist in the public markets.”