Family offices are increasingly investing in private credit, which is a growing force in private credit investing 1 2 3 . Family offices are interested in private credit because of the double-digit returns and strong cash flow that it offers
4 1 . They are also eager to invest in private credit because they have so much cash on hand and are typically under-leveraged, with little debt, which makes them agile and quick with loans, giving them an advantage over other types of lenders 4 . However, investing in private credit also carries risks, and most family offices are working with expert managers or funds to invest in this sector 4 .
According to a survey by Aeon Investments, family offices controlling a total of $98.4 billion of assets are increasingly turning to alternatives, with real estate and private debt being the top choices 5 . Family office investment managers said the strong performance of alternatives is the key reason for the switch followed by the diversification 5 . The rise in the private capital model is changing the way investments and transactions are completed, and family offices can use their own competitive advantages to enact the transaction and then refinance it if they need to, making them much more flexible 5 .
Here are some examples of family offices investing in private debt 6 : Tecum Capital Family Office HB Capital (Blokker Family Office) Black Cliffs Partners (Lunt Family Office) Quantum Ventures Family Office Family Office of the late Paul Allen