Family Offices Reshape Private Markets Deal Flow

What's New

Family offices are no longer passive fund investors but active deal partners appearing alongside sovereigns and pensions on major transactions, with secondaries emerging as the single most requested strategy across every geography from New York to Dubai to Tokyo. In a conversation on the Alt Goes Mainstream podcast, Sara Naison Tarajano, Partner and Global Head of Goldman Sachs Apex Family Office Coverage, revealed that corporates raising capital now treat the family office channel as a strategic capital source on par with institutions, a shift so dramatic that she has gone from joining investment banking pitches once every few months in 2018 to multiple times per week today. Goldman's Apex platform, which serves more than 600 family offices globally, is now facilitating the largest agency secondary transactions in the firm's history as these investors deploy 42% of their portfolios into alternatives while maintaining 12% cash reserves to act opportunistically in dislocations.

Why It Matters

The institutionalization of family offices is fundamentally expanding who sits at the table in private capital formation. These investors combine permanent capital bases, board level engagement appetite, and multi generational time horizons that make them strategically differentiated from traditional LPs constrained by fund life cycles and redemption pressures. As 35% of surveyed family offices plan to redeploy excess cash into private markets and public equities, the channel is becoming large enough to influence deal terms, competitive dynamics, and product design across the alternatives industry.

Big Picture Drivers

• Deal flow integration: Family offices are being embedded in investment banking pitches and consortium M&A processes at accelerating pace, with corporates now viewing the channel as a strategic capital source alongside sovereigns, pensions, and private equity firms.

• Secondaries as universal demand: Every geography and family office segment is converging on secondaries as a preferred entry point, attracted by transparency into underlying assets, discount entry, J curve mitigation, and downside protection during a period of elevated valuations.

• Cash redeployment cycle: Family offices globally hold 12% in cash (19% in Asia), creating a significant deployment reservoir as families recognize that excess cash creates an inflation drag on long term purchasing power.

• International expansion: Newer wealth creation in the Middle East and Asia, combined with higher geopolitical sensitivity and larger cash positions, is producing distinct investment behaviors that require localized coverage rather than centralized distribution.

• Public private convergence: Companies now take an average of 11 years to go public versus under 7 in 2014, blurring the boundary between public and private markets and driving demand for liquidity solutions across the private company lifecycle.

By The Numbers

• 600+: Family offices served globally through Goldman Sachs Apex across the US, Middle East, Asia, and Europe.

• 42%: Average alternative allocation among surveyed family offices, roughly double what Goldman recommends for the average wealthy individual.

• 51%: Share of family offices now using AI in their investment process, from memo generation to data analytics.

• 5%: Average outperformance of even median performing buyout funds versus the MSCI World index over the past 20 years.

• 12%: Cash allocation across surveyed family offices, maintained both to fund capital calls and to deploy opportunistically during market dislocations.

Key Trends to Watch

• Evergreens as tactical instruments: Ultra high net worth family offices are using evergreen funds not as core allocation vehicles but as tactical trading tools to express views during market dislocations, while maintaining strong preference for drawdown funds with co investment access.

• Financial sponsors coverage: Goldman is building dedicated early stage coverage around emerging private equity, credit, and venture founders, embedding with the next generation of alternative asset managers before they reach institutional scale.

• After tax return discipline: Naison Tarajano's insistence that pre tax returns are "completely irrelevant" for individual investors signals a coming recalibration in how private markets products are evaluated by the wealth channel, where tax efficiency may rival gross performance in manager selection.

• Single asset concentration risk: The primary danger as the wealth channel scales into private markets is investors taking concentrated positions in individual direct deals without the portfolio diversification discipline that institutional allocators have built over decades.

The Wrap

Family offices have crossed a threshold from passive fund investors to active participants in institutional deal flow, fundamentally expanding the capital formation ecosystem for private markets. The firms that will capture this opportunity are those with integrated platforms spanning investment banking origination, asset management product manufacturing, and wealth advisory, enabling them to deliver institutional quality deal flow while wrapping it in the tax, estate, and governance infrastructure that distinguishes wealth management from pure asset management. For the broader wealth channel, the family office playbook is instructive: build a diversified portfolio across strategies and vintages, maintain enough cash to act in dislocations, obsess over after tax returns, and never be a forced seller in a down market.

Watch Full Episode: Goldman Sachs' Sara Naison Tarajano on Alt Goes Mainstream