Family offices see more tailored products, leverage ‘collective firepower’ for direct deal access

Family offices are increasingly seeking out more tailored investment products, leveraging collective resources to gain access to direct deal opportunities, according to industry leaders. The Cercle: Future of Finance, Singapore Family Office Forum, held on October 6 at The Fullerton Hotel, brought together 60 family office principals, sovereign allocators, and institutional leaders.

Companies like Agentic Funds, a quantitative hedge fund using AI technology; BTC Now, a Bitcoin structured products platform; and Pogum, a bilateral lending platform, are now offering customized solutions to meet family offices' diverse needs. Sam Chowdhury, founder and chief investment officer of Agentic Funds, explained that family offices often have two segments: the patriarch focused on capital preservation, liquidity, and no management fees, and the next generation seeking real exposure to AI technologies.

A five-generation principal from a Dubai-based family office shared a rigorous three-step deal selection process: eliminating what not to invest in, considering if it should be pursued, and evaluating the potential returns. Co-investing with peers is crucial for risk distribution, as wealth erosion in family offices often results from real estate misallocation, disputes over wealth division among heirs, and complex cross-border tax liabilities.

Noting the increasing interest in private markets, the forum highlighted that direct deal sourcing remains fragmented and time-consuming. An investment lead at a US-based family office mentioned that sourcing deals in the secondary market is particularly slow, necessitating the building of dedicated networks with general partners to secure direct access.

Deal-sourcing approaches vary significantly across regions, with Chinese investors traditionally preferring independent sourcing but increasingly partnering with GPs to navigate complex cross-border tech investments. Quality control remains a challenge, with many direct deal proposals being deemed "a waste of time" due to counterparty risks and unverified buyers.

To expedite the process, a Hong Kong-based family office has implemented an AI platform, cutting the decision timeline from two weeks to three to five days, and enabling real-time collaboration among the investment team. As family offices become more institutionalized, they are coming together to seek direct access to deals typically reserved for institutions by pooling funds and applying co-investment strategies native to the family office environment.