At the VCC Family Office Summit 2025, one theme stood out - families today are not short of capital or choice. What they seek is clarity and a higher degree of curation.
Inarguably, the investment product landscape is expanding at an unprecedented pace as product-side innovation engenders investment solutions ranging from public markets to a growing universe of private instruments, including equity, credit strategies, infrastructure, and venture capital. The depth and count of this ecosystem of investment products is acting as a key enabler for optimal asset allocation and portfolio diversification. However, for family offices in particular, it represents not just an opportunity.
It represents a unique challenge of navigating choices that demand more than conventional asset allocation models while embracing the nuanced and evolving needs of family members.
More than just microcosms
It would be easy to assume that all family members or groups of family members are cut from the same cloth and hence, share similar perspectives and needs. In reality, you will rarely come across a family where needs and preferences are homogenous. Each family member may have distinct mandates, preferences, and appetites. For example, a single family might simultaneously prioritise near-term liquidity, reinvestment into operating businesses, and capital preservation for the next generation. Thus, a templatised or a conventional approach to asset allocation will not suffice.
Carve-out strategies that are tailored to specific strategies and goals can be an ideal solution. Take the example of a family patriarch who had two very clear asks – one was to allocate a portion of his equity portfolio for his children, to be transferred over 10 to 15 years and two, was to reinvest a proportion of the profits back into the business. These distinct and diverse mandates could not be addressed by a single strategy. Thus, we chose to carve out a portion of the portfolio and allocate it to long-term compounding engines that do not need to be turned, chased or churned every year. They quietly compound, ready to be passed on to the next generation when the time comes. Similarly, the portion that needed to be reinvested into the business was carved out and allocated in more liquid instruments with relatively shorter time frames.
In a relationship with risk
As the investment universe evolves, so do its risks. Private equity, venture capital, private credit, and infrastructure now dominate conversations. While they offer differentiated returns, they also demand longer holding periods, complex terms, and scrutiny. The challenge often lies not in what is disclosed, but in what remains unsaid.
Many investment ideas appear sophisticated but are difficult to unwind or fully understand. The pace of financial innovation can easily outstrip a family’s ability to evaluate what truly fits. Products may carry illiquidity clauses, exit restrictions, embedded fees, or intermediation layers that are not always visible in standard documentation.
This is where independent, risk-first analysis becomes essential. Thoughtful allocation requires an assessment of governance, liquidity, complexity, and alignment with the family’s goals. Among the many tools families turn to, gold stands out, not just as a traditional store of value, but as a deliberate hedge against volatility and policy shifts. It remains a feature in many of the frameworks that Multi-Act has helped shape over the last 25years.
The crowd is not the compass
When we think about asset allocation, we get busy finding the next big idea, the fabulous opportunities that can compound wealth and meet portfolio mandates. However, it is equally important to know when and where one should not allocate. Families are increasingly influenced by what we call ‘follow impact’. It is the tendency to mirror peers without pausing to assess relevance to one’s context. This is especially true in the case of private market investing, where you will often see investment ideas being shared within closed-door networks and execution taking place based on the recommendations of well-meaning friends. Here, it is important to understand that there are two factors that can play spoilsport. One, asking whether the investment itself is a good idea and two, assessing whether it is the right fit for your portfolio. Resisting the urge to follow the crowd is often what distinguishes portfolios that endure from the ones that do not.
In a landscape defined by expanding choice and increasing complexity, the real edge lies in clarity. Today, the role of the investment advisor has become multi-faceted – it is no longer limited to offering products. Rather, it hinges upon asking better questions and mining more nuanced responses - What is this capital meant to do? For whom are we allocating? And for how long?
The answer lies in building sharper filters so that allocation becomes not just a puzzle to solve, but a blueprint for what comes next.
No VCCircle journalist was involved in the creation/production of this content.
