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AltAssets is the private equity news and research service from Almeida Capital
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PRINT THIS PAGE EVCA study: family offices allocate more capital to private equity13/11/2007. Source: AltAssets. 
Family offices have been increasing their allocations to private equity and this trend is likely to continue, according to a new study by the European Venture Capital and Private Equity Association and the IMD Business School of Lausanne. The average allocation to private equity by the offices interviewed was 12 per cent, with the highest commitment being close to 50 per cent.
On the fund investment side, there is a strong preference for buy-out funds.
The report entitled 'Europe's Family Offices, Private Equity and Venture Capital' also found that more family offices will be established as those retiring company owners who encounter difficulties in finding successors to lead their businesses sell their enterprises. These sales generate cash for family offices to invest, and they are likely to follow their peers investing in private equity and venture capital. Initially, they may only allocate small amounts to private equity but with time they are likely to increase their allocation to the asset class.
EVCA economic and industry analyst Sabine Rummel said, 'Because much of the more recently acquired family wealth has been built entrepreneurially, and some has been realised through a sale to private equity funds, there is a genuine understanding of and support for private equity's role in business creation and improvement and the alignment of shareholder interest that the model provides, particularly among the more recently established family offices.'
The study estimates that there are about 500 family offices actively investing in Europe. Some 100 of them manage over €1bn of assets.
EVCA director Georges Noël commented, 'With family offices currently being a growing and well-suited group of investors, we expect to see much greater interest in private equity. EVCA plans to work closer with family offices in the future to highlight the long-term returns of private equity and increase venture capital involvement among this group.'
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