Family offices allocate to VC funds and direct investments: Campden Wealth

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Key takeaways

Find out how Family Offices (FOs) are taking advantage of venture capital investment opportunities.

FOs are looking more like VCs today

76% of the FOs surveyed invest directly in startups, and 26% source their own opportunities.

Funds provide exposure to venture, but the barrier is access

Funds help outsource deal flow and due diligence, but getting access to quality funds is difficult.

COVID-19 slowed capital deployment, but FOs remain optimistic

63% of FOs said they will retain or increase their venture allocation, despite the pandemic.

The data

Family offices around the world continue to be optimistic about investing in venture capital.

FAMILY OFFICES GLOBAL VENTURE TRENDS

FOs’ venture capital investment is on the rise

FOs have been more active participants in the venture ecosystem over the past decade, many times leading investments in early-stage venture rounds. The primary impetus is strong historical venture capital returns.

“We started with an initial asset allocation target of 5% to VC…we raised it gradually to 10%.”

— CIO, SFO, North America

FAMILY OFFICES GLOBAL VENTURE TRENDS

FOs have 8 fund investments and 10 direct deals on average

Every FO is unique and has a different venture portfolio composition. On average, FOs allocate 46% of their venture portfolio to funds and 54% to direct investments.

FAMILY OFFICES GLOBAL TRENDS

Growing interest in impact/ESG investment

Nearly half (47%) of FOs engage in impact/ESG VC investment. Interest is growing, particularly among the next generation, and as FOs appreciate, returns are not necessarily compromised.

“ESG…is what people are geared towards, a more ethical form of capitalism.”

— Founder, SFO, North America

FAMILY OFFICES GLOBAL VENTURE TRENDS

Highest returns expected from emerging fund managers

Pre-COVID-19, 61% of FOs believed the highest returns in the next decade will come from emerging managers.

FAMILY OFFICES GLOBAL VENTURE TRENDS

Despite COVID-19, FOs remain committed to venture

63% of FOs said their capital allocation to venture will stay the same or increase, despite the pandemic. But FOs may deploy capital more slowly, place greater emphasis on quality managers, and move further toward sector diversification.

“We think FO interest in the [venture] asset class will persist…engagement will happen at a slower pace, be more strategic.”

— Venture lead, SFO, North America

Family Offices Investing in Venture Capital: Global Trends & Insights 2020

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