Wednesday, May 27, 2015

Private Equity Targets Family Wealth

Australia's BrisbaneTimes reported:

Private equity firms want wealthy families for more than just their money.

Family offices bring expertise in buying companies, usually have fewer regulatory restrictions and can take bigger risks than pensions or endowments, Michael Arpey, a managing director at Carlyle who oversees fundraising, said in an interview.

Some private equity firms are enticing family offices to invest with the promise of co-investment opportunities. That's when families invest alongside the firms rather than through a pooled vehicle, and are charged reduced or no fees.

The story highlights efforts by The Carlyle Group, KKR, Blackstone and Blackrock to recruit wealthy family offices for investment.

"There's been an explosion of family offices," Feurtado said. "It's a very, very vibrant and growing industry."
As worker's income stagnated, wealthy families' assets exploded. 

There are an estimated 4000 family offices globally, according to London-based researcher Campden Wealth.  
Private equity underwriters follow big money.  They trot out their heavy hitters to entice wealthy family offices to invest.  KKR had General David Petraeus meet with a middleman for several rich families. 

Family offices and their advisers manage an estimated $US4 trillion.
 And the rest of the world has how much?