Introduction
In September 2021, an affiliate of Cascade Investment, the private investment entity that holds Bill Gates's assets, agreed to pay $2.21 billion in cash for half of Kingdom Holding Company's stake in Four Seasons Hotels and Resorts. The purchase lifted Cascade's ownership from 47.5% to 71.25% and valued the hotel group at a $10 billion enterprise value, according to the deal announcement. Cascade had first invested in Four Seasons in 1997, when the company was still publicly traded.
Twenty-four years in, it was buying more. No fund was closing, no limited partners were waiting for distributions, and no exit date sat in the model. That is permanent capital at work, and it is the defining feature of a family office.
Family offices show up in deals as fund investors, co-investors beside private equity sponsors, backers of independent sponsors and outright buyers. For bankers they are both counterparties on the buyer list and a quiet career destination, and what follows covers both sides: how they invest and buy, and what the jobs involve and pay.
Family Offices vs Private Equity Funds at a Glance
Family offices and buyout funds can bid for the same company, but they are built differently: the useful split is whose money is invested and how long it can stay invested.
| Feature | Single-family office | Multi-family office | Private equity fund |
|---|---|---|---|
| Whose money | One family | Several families | Outside limited partners |
| Time horizon | Open-ended, often generational | Set by each client family | Roughly ten-year fund life |
| Deal activity | Funds, co-investments, direct deals | Portfolio advice, manager selection | Control buyouts with leverage |
| Investment staff pay | Salary, bonus, sometimes carry | Salary and bonus | Salary, bonus, carried interest |
| US adviser regulation | Family office exclusion available | Registered adviser or trust company | Registered adviser in most cases |
The time horizon row explains why a family office can hold an asset for decades and accept stakes a fund would decline; the pay row explains why the jobs feel different from private equity even where the work overlaps.
What a Family Office Is
The sector is larger than its low profile suggests. Deloitte Private estimated about 8,030 single-family offices worldwide in 2024, up from about 6,130 in 2019, managing roughly $3.1 trillion, and projected more than 10,700 offices with about $5.4 trillion by 2030, according to its family office landscape research. North America held about 3,180 of the 2024 total.
Single-Family Offices
- Family Office
A family office is a private company that manages the wealth and financial affairs of one wealthy family, typically covering investments, tax and estate planning, consolidated reporting, philanthropy and family governance. A single-family office serves only that family and invests only the family's own money, which lets it hold assets indefinitely. A multi-family office provides similar services to several unrelated families.
Most single-family offices manage wealth created by a business, either after a sale or alongside a company the family still controls: in UBS's 2026 Global Family Office Report, which surveyed 307 offices with an average family net worth of $2.7 billion, 77% of families still had an active operating business. That operating heritage gives many offices sector judgment a generalist fund lacks.
The job extends well beyond investing. Non-investment professionals made up 40% of staff in the UBS survey, covering operations, accounting, legal support and lifestyle services; most offices kept consolidated reporting in-house and outsourced specialist work such as tax planning and legal services.
In the US, regulation is light by design. An office that advises only family clients, is wholly owned and controlled by the family and does not hold itself out to the public can rely on the SEC's family office exclusion, adopted in 2011, and avoid investment adviser registration.
Multi-Family Offices
- Multi-Family Office
A multi-family office (MFO) is a firm that provides family office services, such as investment management, tax and estate coordination and reporting, to several unrelated wealthy families. Because it serves more than one family, a multi-family office cannot use the SEC's family office exclusion.
Bessemer Trust is the classic origin story: founded in 1907 as the family office for Henry Phipps, a partner in Carnegie Steel, it opened its capabilities to other families in 1974, according to the firm's own history. The SEC's adopting release says the exclusion does not extend to offices serving multiple families, so multi-family offices typically operate as registered investment advisers or trust companies.
How Family Offices Invest
What the Typical Portfolio Holds
Family office portfolios hold more bonds and cash than large endowments, but carry plenty of real estate and a sizeable slice of direct deals. UBS's 2026 report put alternative assets (private equity, private debt, real estate, hedge funds, infrastructure, commodities, gold and art) at 42% of the average strategic allocation.
| Asset class (UBS, 2025 actual) | Global average | US offices |
|---|---|---|
| Developed-market equities | 27% | 29% |
| Developed-market bonds | 14% | 7% |
| Private equity, direct | 8% | 10% |
| Private equity, funds | 9% | 10% |
| Real estate | 11% | 20% |
| Cash | 9% | 6% |
| Hedge funds | 6% | 6% |
US offices hold roughly a fifth of the portfolio in private equity, split evenly between funds and direct deals, and another fifth in real estate. The direct slice is the one that matters for bankers, because it is where a family office stops being a fund investor and starts behaving like a buyer.
From Fund Commitments to Direct Deals
Most offices pair outside managers with deals of their own. In Heidrick & Struggles' 2025 Family Offices Compensation Survey of 106 family office investors in the US and Europe, about two-thirds used a hybrid approach of external managers and direct investments, 20% used only external managers and 16% only direct investments.
- Fund commitments: investing as a limited partner in buyout, growth or venture funds, paying fees and carry for access
- Co-investments: a stake in one company alongside a sponsor, usually on reduced fees
- Direct deals: sourcing, diligencing and owning the stake itself, minority or control
- Co-Investment
A co-investment is a direct minority investment in a single company made alongside the private equity sponsor leading the deal, rather than through the sponsor's fund. Co-investors, typically limited partners, family offices or sovereign funds, usually pay little or no management fee or carried interest on it, and the sponsor uses their capital to write a larger equity check than its fund could support alone.
Direct investing gives the family control over what it owns and for how long, puts its operating experience to work, and keeps upside a fund manager would otherwise share. The cost is concentration and staffing: a direct program needs people who can diligence a company, which is why family offices hire bankers.
How Permanent Capital Changes Deal Behavior
Family offices share the trait that defines sovereign wealth funds in dealmaking: capital with no maturity date and no outside investors to repay. But where a sovereign fund answers to a state mandate, a family office answers to one family, so its behavior tracks the principal's preferences.
No Fund Life, No Exit Date
A buyout fund has a roughly ten-year life and carried interest paid on returns above a hurdle, so every extra year of holding drags down its internal rate of return unless value keeps pace. A family office has no such clock and can judge a deal by the multiple of money earned over a long hold, the trade-off covered in the guide to IRR, MOIC and cash-on-cash returns. For one investment and one exit:
Here is the number of years held, and the arithmetic shows why the two buyers think differently:
- A fund earning about 20% a year for five years turns each dollar into about 2.5x
- A family office earning about 10% a year reaches a similar 2.6x in about ten years
- The same office compounding at 10% for twenty years ends near 6.7x, with no sale, no new deal search and no transaction costs in between
That is the heart of the family office pitch to a seller: the buyer's model does not need a buyer of its own five years out.
Flexible Structures and Lighter Leverage
Without an exit to engineer, family offices can accept structures a fund struggles with:
- Minority stakes in founder-led companies, since the office needs no control to force a sale
- Long co-ownership, like Cascade's partnership with Kingdom Holding and founder Isadore Sharp, who kept his 5% stake through the 2021 deal
- Structured equity such as preferred stock, trading some upside for protection
- Lighter leverage, because returns do not rest on financial engineering over a short hold
UBS's data supports the last point: 65% of family offices used leverage in some form in its 2026 survey, a share that has declined steadily over five years, and only 29% borrowed at the asset level (42% among US offices).
Permanent capital changes the returns math: Work through IRR, MOIC and LBO returns questions with worked answers, start practicing interview questions for free and be ready when an interviewer asks why a buyer with no exit date bids differently.
Family Offices as Buyers and Capital Providers in M&A
In an M&A process, a family office can occupy three seats, each calling for a different pitch from the sell-side banker and a different read of the buyer's motives.
Competing With Private Equity for Founder-Owned Companies
As a direct buyer, a family office often competes with sponsors for founder-owned businesses whose sellers care about more than price. The pitch writes itself: no resale in five years, the company's name and culture kept, and room for the founder to retain a stake. The weakness is firepower: a sponsor using acquisition debt can often stretch further on headline price, and a lean office has less operating bench than a fund with portfolio operations staff. For the seller's banker, the question is which matters more to the client: the highest number, or the identity of the owner for the next twenty years.
Co-Investing Alongside Sponsors
Large family offices also partner with sponsors, supplying equity on deals too big to lead alone, often as members of a bidding consortium.
Partnering gives the office sponsor-led diligence on a deal it could not run alone, often on better economics than a fund commitment. The catch is the sponsor's exit timetable, which reintroduces the clock the family office exists to avoid.
Backing Independent Sponsors and Searchers
The third seat is capital provider to dealmakers without committed funds. Independent sponsors find a company first and raise equity deal by deal, while search funds back a first-time CEO to buy and run one business; both are explained in the post on how search funds work and compare with independent sponsors.
McGuireWoods' study of nearly 300 independent sponsor deals closed from 2018 to 2021 singled out family offices as investors who value the sponsor's post-closing work, since they do not run the portfolio company themselves. The appeal is direct deal exposure without a full team; the risk is underwriting the sponsor's judgment as much as the company.
When a Family Office Is on the Buyer List
Experienced bankers treat family offices as a distinct buyer type, with its own strengths and failure modes.
Speed and Who Decides
Decision rights are concentrated: UBS found 60% of family offices had an investment committee, and in Heidrick's survey 63% had five or fewer investment professionals (71% in the US). That cuts both ways:
- Fast answers when the principal is engaged, settling in one meeting what takes a fund weeks
- Stalls when the principal is traveling or rethinking strategy
- Thin bandwidth for a full auction, with heavy reliance on lawyers and accountants for diligence
Learn early who actually signs off, and whether that person has seen the deal.
Information Demands and Certainty of Funds
Requests vary widely. A lean office may ask fewer modeling questions than a sponsor and more about management and downside protection, and many care intensely about privacy. Certainty of funds is usually a strength, since equity comes from the family's balance sheet, but it still has to be proven:
- Which entity is signing, and does it hold the cash?
- Is the office bringing co-investors, and are they committed?
- Does the bid quietly rely on debt financing?
Family offices, sponsors and strategics value deals differently: The 160-page PDF covers valuation, LBO and M&A frameworks with the technical questions interviewers ask, and walk into buy-side and M&A interviews ready to compare sponsors, strategics and family offices.
Working at a Family Office: Roles, Pay and Recruiting
Who Family Offices Hire and What the Jobs Look Like
Teams are small. Morgan Stanley's 2025 single-family office compensation report put average in-house staff at about 20 across its US survey (about 30 at offices with $1 billion or more of assets), counting everyone from accountants to the chief investment officer. Nearly every investment seat is therefore a generalist seat, reviewing a buyout fund's quarterly letter one hour and a direct deal's quality of earnings report the next.
The entry points line up with banking. The same report describes a senior analyst seat typically filled by people with two to four years of pre-MBA experience, exactly when banking analysts move on, and an associate seat for MBAs or equivalent experience. Offices with direct programs hire bankers and private equity investors for deal skills, while fund-focused offices tend to value asset management or endowment backgrounds. The other paths these candidates usually weigh are covered in the overview of investment banking exit opportunities.
What Family Offices Pay
The most detailed public data comes from Morgan Stanley and Botoff Consulting's 2025 report, which surveyed 433 US family offices and similar firms in mid-2024 and broke out 113 investment-focused offices. Their medians:
| Role | Typical background | Median base | Median total cash |
|---|---|---|---|
| Analyst | Entry level | $100K | $125K |
| Senior analyst | 2-4 years pre-MBA | $120K | $152K |
| Associate | MBA or equivalent | $155K | $196K |
| Senior associate | 4+ years post-MBA | $200K | $257K |
| Portfolio manager | Experienced investor | $226K | $389K |
| Chief investment officer | Leads the portfolio | $500K | $896K |
Junior cash sits below the bulge bracket analyst pay many bankers would leave behind, and the table excludes long-term incentives. In Heidrick's survey, 40% of US respondents received carried interest and 49% could co-invest their own money. Morgan Stanley found carry pools from 10% or less up to private equity's typical 20%, but long-term incentives skew senior: at investment-focused offices with such plans, executives were eligible at 94% and staff at 38%. The SEC rule helps on co-investment, since investment staff with a year of relevant experience can count as key employees and invest alongside the family.
How to Find and Approach Roles
Few family offices run campus programs, so the search looks more like off-cycle recruiting than the private equity headhunter sprint. Roles surface through:
- Executive search firms with family office practices
- Private bankers and lawyers who serve family offices
- Independent sponsor and search fund circles, where family offices invest
- Your own deal flow, since an office that bid on your process already knows your work
The Trade-Offs Bankers Underestimate
The case for a family office seat is real: exposure across funds, co-investments and direct deals, a long-term owner's perspective and proximity to the decision maker. The costs are less visible:
| Upside | Trade-off |
|---|---|
| Generalist exposure across asset classes | Less depth than a sector-focused fund |
| Direct access to the principal | Career tied to one family's priorities |
| Long-hold, owner mindset | Fewer completed deals to point to |
| Carry and co-investment at senior levels | Lower cash pay in junior seats |
| Small team, real responsibility | Thin promotion ladder |
Key-person risk deserves particular weight. Only 35% of offices in UBS's 2026 survey had a succession plan for the family office itself, and J.P. Morgan found 86% lacked a clear succession plan for key decision makers. A new generation or a principal who winds down the direct program can redesign a job overnight, and the brand on your resume is a private name few recruiters recognize.
Key Takeaways
- A family office manages one family's wealth, or several families' in a multi-family office; only single-family offices can use the SEC's exclusion.
- Private equity takes about a sixth of the average portfolio in UBS's data, split between funds and direct deals.
- Permanent capital lets an office judge deals by long-run multiples rather than IRR, making minority stakes and lighter leverage workable.
- In M&A, family offices act as direct buyers, co-investors with sponsors and backers of independent sponsors; on a buyer list, confirm who decides and whether the funds are real.
- Teams are small, junior cash pay sits below banking, and carry or co-investment is more common in senior seats.
Conclusion
A family office is simple to describe and hard to generalize about. From the same starting point of one family's money and no fund life, offices range from a five-person team allocating to funds to a firm that buys control of a hotel group it first backed decades earlier.
For bankers, the two sides of the topic reinforce each other. Understanding how permanent capital changes a buyer's math makes you better at running a process with a family office on the list, and it is exactly what an office looks for in a hire.
If the seat appeals, diligence the family as carefully as the firm: where the wealth came from, how decisions get made, and what happens when the next generation takes over. A family office job is only as durable as the principal's commitment to investing.
