From Niche to Necessity: How Private Equity is Becoming a Cornerstone of Family Investment Strategies
How Private Equity is Becoming a Cornerstone of Family Investment Strategies
Despite fundraising pressures, capital deployment in non-public markets increased by double digits across asset classes in 2024. Globally, more deals were done, and they were made at higher prices. Deal value increased by 18%, while deal count increased by 7% during the year*.
Broadly speaking, client work in the sector suggests that the trend appears to be the result of three main factors: increased awareness of the asset class, improved access via investment vehicles and the structural features of private capital investments that lend themselves to modern long-term wealth management strategies.
Younger generation boosts interest in private capital
Interactions with clients over the last few years support the view reported widely in the press that newer generations of wealth owners are increasingly open to diversification beyond more traditional assets, including private equity. This has led to a greater awareness generally of the things private equity can bring to modern wealth management.
Greater access to private market opportunities
Historically, private equity opportunities were the preserve of institutions and only the very smallest circle of in-the-know investors. Yet today, families can invest through a variety of vehicles including funds or funds of funds programmes run by established managers or directly through deals providing hands-on ownership and a more engaged ongoing relationship with investee companies.
Expansion of mid‑market private equity opportunities
Wealthy families appear to be increasingly drawn to the middle‑market segment as mid-sized businesses offer multiple growth levers to private equity active ownership. They have greater potential to scale up faster and are often under-managed, making them most appealing to private equity managers. The mid-market also offers a far deeper and highly diversified pool of opportunities, with the number of companies falling into that bracket far exceeding the number of smaller companies, according to US government statistics**.
A natural fit for families’ long-term time horizons
Unlike institutions, which are constrained by shorter-term reporting cycles, many families have multi-generational, or even perpetual, investment horizons. It means that they can be more flexible than other private investors when it comes to the longer holding periods traditionally associated with private equity investments. The sector’s track record of outperforming public markets highlights the potential rewards for families with patient capital strategies. The asset class’s long-term track record highlights the rewards for families with patient capital strategies through the benefits of diversification and the potential for outperformance***.
Investing in private markets via a family office fund of funds programme, brings governance and a clear communication experience for investors. Though the wider private equity industry has matured a good deal recently, families can benefit from the transparent reporting, more attractive fee structures, and institutional grade due diligence that they can provide.
* McKinsey Global Private Markets Report 2025
** https://www.irs.gov/statistics/soi-tax-stats-corporation-data-by-size, 2025
*** Hamilton Lane Market Overview, 2026
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