Family Offices Pivot Toward Direct Deals as Hedge Fund Interest Wanes

The latest report from FINTRX, a private wealth intelligence platform, highlights that 92.7% of the 96 family offices added to its database during the second quarter expressed a primary interest in direct investments. This trend marks a significant departure from the broader market, where hedge funds and private credit remain standard, yet currently capture only 10.4% and 6.3% of interest among this newest cohort of firms respectively.

Single-family offices now dominate the landscape, accounting for 70.8% of new additions—a jump from 63% in the first quarter. Research associate Patrick Galvin noted that newer, younger firms are gravitating toward equity-oriented strategies, leaving externally managed fund structures behind. This wave of capital is largely driven by first-generation wealth, with 68.6% of the new firms originating from entrepreneurial backgrounds in technology, real estate, and private investing. For capital managers, the message is clear: the path to securing family office funding now relies on co-investment opportunities and direct deal flow rather than traditional fund allocations.