Jefferies

Actionable Ideas for Companies and Sponsors

Family Offices Becoming Important Corporate Acquirors

Family offices are looking to leverage the sector expertise, relationships and entrepreneurial experience that have led to their wealth creation, as well as seeking to drive stable and steady returns over a longer investment horizon than private equity funds. A recent study published by research firm Family Wealth Alliance estimated there are 3,000 family offices in the U.S. representing over $1.2 trillion in assets. According to a year-end 2016 annual survey of family offices, the portion of family office assets allocated to direct investment eclipsed their investment in private-equity funds and is approaching their asset allocation to hedge funds.

Recent examples of significant direct acquisitions by family offices include: 1) Thyssen-Bornemisza Groups, the family office of one of Germany’s wealthiest families, which announced the $900 million acquisition of DTN, a data and information provider from Schneider Electric SE; 2) Tom Pritzker’s family office, Warren Stephens’ family office and Redwood Capital (Jim Davis’ family office), which announced the acquisition of South Carolina cable operator Hargray Communications from Quadrangle Group in a transaction rumored to be approximately $700 million in value; and 3) JAB Group, the global investment vehicle for Germany’s Reimann family, which announced the $7.5 billion acquisition of Panera Bread.