Family Offices Shift Towards Direct Investments

The recent Family Wealth Report Investment Summit in New York highlighted pressing topics such as the potential economic impact of the new Republican Congress on the soaring US debt, which stands at $34 trillion, and the generational wealth transfer predicted to exceed $84 trillion over the next two decades. Scott Eckel from Charles Schwab noted that campaign promises may exacerbate the debt crisis without clear funding solutions, as cuts to programs like Social Security seem politically unfeasible. Concurrently, family offices are increasingly opting for direct investments in private companies, with half planning to bypass private equity funds altogether in favor of direct deals, reflecting their growing confidence and sophistication in investment strategies. A survey revealed that over half of family offices prefer syndicate deals, while challenges persist in acquiring sufficient deal flow due to their preference for privacy. In Singapore, the number of family offices has surged, driven by favorable conditions and strategic investment shifts, emphasizing the need for better education and professional development in this sector.