Serge Krancenblum (IQEQ): PE/RE and family offices

Serge Krancenblum, Group Executive Chairman at IQ-EQ, describes the objectives behind IQ-EQ Crossroads and the increasingly disruptive role of family offices within private equity.

 

What are the objectives of IQ-EQ Crossroads 2019? 

 

The objective of IQ-EQ Crossroads is to create a thought-provoking platform to enable the exploration of key issues within our sector, with industry experts driving the debate. The theme of this year’s conference aims to shed some light on the industry while fostering relationships – and even competition – between the worlds of private equity and real estate funds and family offices.

"In an environment in which good deals are scarce and dry powder has reached a record high, family offices become a direct competitor to funds in the race for the best deals”

 

Are family offices playing a disruptive role in the PE/RE funds industry? 

 

The growing sophistication of family offices and the low return environment for equities have prompted family offices to turn to alternative investments. It is true to say that they are disrupting the PE/RE industry as they are no longer investing solely through funds; instead, they often invest directly (around 14% of their assets in direct PE and the same in RE). In an environment in which good deals are scarce and dry powder has reached a record high, family offices become a direct competitor to funds in the race for the best deals.

 

 What developments do you foresee for family offices over the next five years?

 

It is clear that family offices are expanding their focus beyond wealth management and some of the big single-family offices are recruiting fund managers and operating in the same way as private equity firms. I think that this trend will continue over the next five years and that PE/RE firms will have to compete with family office firms for top talent.