Why family offices are winning deals over private equity firms

Family offices are increasingly beating out private equity firms in mega-deals because of their fast decision-making and, often, their value-driven approach as owners.

Savvy family offices are the new sophisticated investors, according to Bloomberg News, with a series of moves within the last couple of years cementing the trend; they poach talent and they buy fast.

For example, take the sale of Quadrangle Group’s Hargray in March: in eight days, a consortia of families, headed by The Pritzker Organization, bought the company.

“There’s a network that’s growing of the big family offices who do these kinds of deals,” said The Pritzker Organization’s managing director Joseph Gleberman to Bloomberg.

“I was in the private equity business at Goldman for a long time, and it’s not dissimilar to what it was like 20 years ago, when you started to see Blackstone do a deal with KKR or Goldman do a deal with Warburg Pincus.”

It’s not just about speed though. Ring Container Technologies CEO Ben Livingston said his company ruled out the majority of private equity and strategic buyers from their sales process; limiting the pool of potential buyers to family offices and select private equity because Ring wanted a long-term buyer.

“Our interest was to find a buyer that would preserve our culture and essentially keep our leadership in place” Livingston told Bloomberg.

[Bloomberg News] — E.K. Hudson