Private Wealth in Private Credit Part 1: What Families Value
In an environment where institutional LPs are constrained by the lack of distributions into their coffers, it is natural for GP attention to turn to less traditional sources: family offices, wealthy individuals, and even retail investors. Bain’s 2025 Global Private Equity Report predicts that 25% of AUM growth in private markets to 2033 will come from private wealth.
But how do you get your share?
FAMILY OFFICES PLAY A KEY ROLE
Whilst direct access to private markets funds is a relatively new concept for retail investors, family offices and UHNWI (ultra-high-net-worth individuals) have been active supporters of private markets for decades. According to Deloitte’s estimates, the number of single family offices (“SFOs”)has grown to more than 8,000, with expectations that another 2,000 will be added over the next five years. Family offices are famously idiosyncratic—and private—so it is just as difficult to identify the total amount of capital they control as it is to pinpoint how each invests. This explains the wide range of the approximations available: Deloitte puts current SFO AUM at around $3.1Tn, whereas With Intelligence calculates the total at $4.67 Tn (which is halfway between the respective GDPs of Indonesia and Spain).
SFOs are significant investors into private markets, with JPMorgan’s 2024 Global Family Office Report touting average SFO alternatives exposure of 45%. Clearly, a lot of that is in real estate and other asset classes and the numbers are certainly much lower for private credit, but UBS still reported that SFO investments into private debt rose from 2% to 4% of portfolios in 2024, and that allocators predicted increasing this to 5% by the end of 2025.
Conservatively, that would amount to more than $150 B—quite the prize.
FIRST MOVER ADVANTAGE
It is never a good idea to generalize about family offices, but they have certainly stepped in to back new managers and new strategies where institutional investors have hesitated. Often eschewing the red-tape and administrative constraints all too common within private markets teams at more traditional institutions, SFOs have a reputation for making quicker decisions and newer managers—as well as those setting up new strategies within existing shops—would to well to prioritize building relationships with these investors. For a growing asset class such as private credit, this is especially the case.
HIRING THE RIGHT PEOPLE
So how do private credit firms recruit the right people to access this opaque but rewarding channel?
Track record is not enough: It’s always better to hire in those with a strong history of bringing in capital. However, in the family office world, this is only half the story: Credibility matters just as much. If you can hire veterans with a good reputation with the investors they are trying to attract, you will improve your prospects immeasurably.
Networks matter more: The right hire already has the trust of principals, CIOs, and gatekeepers—relationships that cannot be cold-called into existence. Sometimes the right name is the only way to open a door…
Listening and flexibility are differentiating skills: Every SFO has different goals and different challenges. The best professionals know how to subtly tease out the priorities, piece together the background, and tailor the pitch accordingly.
FINAL THOUGHT
Family offices may be opaque and unpredictable, but they are often the launchpad for new strategies in private credit. For firms willing to invest in the right people, they can be the difference between waiting for institutional approval—and getting out of the gate first.