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Partners Andrew Apfelberg and Stefanie Lipson co-authored an article in Wealth DFM exploring where family offices can gain an edge in U.S. middle-market acquisitions, from patient capital and flexible deal structures to long-term ownership and succession planning.

Excerpt: 

The well-conditioned, well-funded machine of private equity funds comes prepared with a full complement of investment bankers, a fully staffed team of deal counsel, valuation, and diligence professionals, and increasingly sophisticated artificial intelligence tools to optimise the process, all deployed in force to get the deal closed, and usually on their terms.

And private equity is seemingly ubiquitous, in every industry (even professional services). For private single- and multi-family offices looking to invest directly or partner strategically in the private market, it can seem as though they are David, hoping to defeat Goliath PE.

Despite the uneven matchup, family offices can succeed in these contests more often than might be expected by using to their advantage the very qualities that make them distinct from private equity.

While we have traditionally seen mostly U.S.-based family offices involved in U.S. middle-market direct acquisitions, British family offices are among the most active direct investors anywhere, and more of them are now looking across the Atlantic to buy private companies in the U.S., arguably the largest and deepest middle market in the world.

Because what distinguishes a family office buyer from a private equity buyer is inherent in the family office model rather than in any particular country’s version of it, this article explores the common themes in a U.S. middle-market deal process where family offices find success with the seller, even against a private equity firm, and what a cross-border dimension adds.

One idea runs underneath all of it. Technology is moving faster, legal and tax regimes keep shifting, families are more mobile across borders, and priorities change with each generation. In that environment, optionality — the ability to keep choices open, has become a valued objective and a strategic advantage in its own right.