A family office investment strategy is not just an asset allocation pie chart. It is the full system a family uses to set objectives, choose what to invest in, decide who approves investments, and monitor results across public and private markets. It also answers practical questions people ask all the time, like how family offices invest, what family offices invest in, and whether family offices invest in startups.
This guide is educational and practical. It focuses on what makes investment strategy work in real family offices: governance, pacing, liquidity, deal evaluation, and reporting discipline across multiple entities.
Key Takeaways
- A family office investment strategy is equal parts portfolio design and execution. If you only focus on returns, you will miss liquidity, governance, and reporting needs that drive outcomes.
- Single family offices and multi family offices often invest in similar assets, but they make decisions differently. SFOs may prioritize control and bespoke decisions, while MFOs prioritize repeatability and consistency across families.
- Private markets can improve long-term outcomes, but they add operational work. The best strategy includes a pacing plan, clear evaluation criteria, and realistic monitoring expectations.
- Your reporting system is part of your strategy. Clear records, consistent valuations, and consolidated views reduce decision friction and protect trust with family stakeholders.
What “family office investment strategy” means (and what it does not)
A family office investment strategy is a documented approach to five things:
- Objectives: what the family is trying to achieve and why
- Constraints: liquidity needs, risk limits, tax realities, values, and concentration issues
- Portfolio design: target allocation ranges and what role each asset class plays
- Implementation: managers, funds, direct deals, and how capital actually gets deployed
- Monitoring: what you track, how often you review it, and how you change course
What it is not:
- It is not a list of “good investments.”
- It is not a copy of a university endowment model without adjustments.
- It is not a plan that ignores the operating business, family spending, or entity structure.
- It is not just a view of performance. It includes how decisions are made and documented.
A useful strategy should help the office say “yes” faster to good opportunities and say “no” faster to misaligned ones.
Modern Back-Office Software
FundCount brings accounting, investment reporting, and entity-level consolidation into one system.
Start with the family’s objectives and constraints
Before picking asset classes, define the job the portfolio must do. This is where strategies become truly different from one family to another.
Objectives to clarify
Wealth preservation vs wealth growth
Some families want inflation-protected stability. Others want to compound aggressively. Many want both, but in different “sleeves.”
Spending needs
What must the portfolio fund? Lifestyle spending, philanthropy, taxes, insurance premiums, or capital calls.
Time horizon
Are you managing for a patriarch and matriarch in their 70s, or building for three generations?
Control preferences
Do you want to hire best-in-class managers, or do you want direct ownership and involvement?
Values and mission
Is impact investing a core goal, a screen, or a separate bucket?
Constraints that shape the strategy
Liquidity
Private markets feel easier when the family can fund commitments without selling public assets at the wrong time.
Concentration
Many families have a concentrated operating business or a single stock position. This changes the rest of the portfolio.
Entity structure
Trusts, holding companies, partnerships, and foundations can change what “after tax return” means.
Decision bandwidth
A direct heavy strategy needs a team that can source, diligence, execute, and monitor.
Practical mini checklist
- What must be liquid in 30 days, 90 days, and 12 months
- What risks are unacceptable
- How much illiquidity is realistic, not theoretical
- Who can approve a new manager or a new deal
- What must be reported quarterly to family stakeholders
- What is the family’s definition of success beyond returns
If you can answer these, asset allocation becomes simpler.
Governance: who decides, how decisions get documented, and how you avoid strategy drift
Strategy fails more often from governance problems than from bad manager selection.
Single family office vs multi family office governance
Single family office (SFO)
An SFO often has fewer “clients,” but more complexity around family dynamics. Decision-making may be centralized in one principal or shared across an investment committee.
Multi family office (MFO)
An MFO typically needs a more repeatable process. It may run model portfolios or policy ranges for different client profiles. It also needs clearer documentation because multiple families may ask similar questions at different times.
Use an Investment Policy Statement
A basic investment policy statement should cover:
- Objectives and constraints
- Target allocation ranges and rebalancing rules
- Liquidity policy
- Risk policy and concentration limits
- Private market pacing approach
- Delegations and approval limits
- Reporting cadence and definitions
The IPS should not be a static document. Update it when the family’s life changes, when an operating business changes, or when the portfolio grows in complexity.
Use a one-page decision memo for private deals
For private investments, create a simple decision memo template:
- What is the opportunity, and why now
- How does it fit the strategy
- Key risks and how they are mitigated
- Deal structure and governance rights
- Cash flow expectations and follow-on needs
- Valuation approach and how it will be monitored
- What must be true for this to be a good decision
This prevents ad hoc investing that feels exciting but does not compound well.
Asset allocation: how family offices typically build the portfolio
A common family office portfolio is built in sleeves, each with a clear role.
The usual building blocks
Liquidity sleeve
Cash and short-duration fixed income for spending needs, taxes, and capital calls.
Core growth sleeve
Public equities and diversified funds compound over time.
Diversifiers
Strategies that aim to reduce portfolio volatility or provide alternative return sources. Examples include certain hedge fund styles and defensive assets.
Real assets
Real estate, infrastructure, and other assets that may offer inflation sensitivity and long-duration cash flows.
Private markets
Private equity, venture capital, and private credit through funds, co-investments, or direct deals.
Opportunistic sleeve
Special situations, secondary purchases, or niche assets that require skill and patience.
Table: Strategy archetypes used in family offices
| Strategy archetype | Primary goal | Typical mix | Liquidity profile | Operational complexity | Who it fits |
| Capital preservation | Protect purchasing power | Higher cash and high-quality fixed income, modest equity, selective alts | High | Low to medium | Families’ funding, ongoing spending, and distributions |
| Balanced growth | Compound with controlled risk | Public equity core plus meaningful private markets and real assets | Medium | Medium | Families with long horizons and moderate liquidity needs |
| Entrepreneurial direct heavy | Concentrated upside and control | More direct deals, co-investments, private equity, and VC | Low to medium | High | Families with deal capacity and strong governance |
| Impact led | Align capital with mission | Mix of core assets plus thematic impact allocations | Medium | Medium to high | Families where values are a primary objective |
| Barbell | Stability plus long-duration bets | Large liquidity sleeve plus long-duration private or real assets | Medium to low | Medium | Families managing uncertainty and timing needs |
A useful strategy does not pretend that every sleeve should be optimized the same way. Each sleeve has a job.
Private markets in a family office strategy (PE, VC, private credit, real assets)
Private markets are often where family office strategy becomes most distinctive. They can also be where strategy breaks.
Three ways family offices access private markets
Fund investments
This is the most common starting point. It provides diversification and a professional process, but the family gives up control.
Co investments
Co-investments can reduce fees and increase selectivity, but they require faster decision-making and better internal processes.
Direct deals
Direct investing can fit families who want control and long-duration ownership, but it requires sourcing, diligence, and monitoring capacity.
How to set private market pacing
A pacing plan answers two questions:
- How much capital should we commit per year
- How much illiquidity will we have in two to five years if we follow the plan
Without pacing, families often do one of two things: over-commit in good markets or freeze in uncertain markets and miss long-term opportunities.
Do family offices invest in startups
Yes, many do, but the “how” matters.
Most family offices invest in startups through one or more of these paths:
- Venture capital funds for diversified exposure
- Co-investments alongside a lead investor
- Direct angel-style investments where the family has domain expertise
- Secondary purchases when early investors need liquidity
A practical guideline: startup investing should be sized as a small sleeve unless the family has a clear edge and governance around follow-on capital needs.
Family office impact investing: what changes in the strategy
Impact investing can mean different things, so define it first.
Common impact approaches
Screening
Avoiding certain sectors or practices. This is the simplest approach to implement.
Thematic investing
Allocating to themes like climate, education, health, or financial inclusion.
Catalytic capital
Accepting lower financial returns or higher risk to pursue a specific mission outcome.
The practical rule
If impact matters, build impact measurement into the strategy and reporting cadence. Otherwise, impact becomes a marketing label rather than a real portfolio discipline.
How to evaluate private market investments (criteria you can actually use)
This section is the core answer to the criteria for comparing family offices’ private market investments.
Family offices evaluate private opportunities differently depending on whether they are comparing a fund, a co-investment, or a direct deal. Still, a consistent scorecard prevents inconsistent decisions.
Table: Private market deal and fund evaluation scorecard
| Area | What “good” looks like | Questions to ask | Red flags |
| Team | Clear track record and repeatable process | What decisions drove outcomes | Vague attribution, high turnover |
| Strategy edge | A real reason for access or advantage | Why will this win now | Generic story, crowded trade |
| Alignment | Clear incentives and meaningful skin in the game | Who wins when outcomes are average | Fees that reward growth, not quality |
| Fees and expenses | Transparent, understandable, predictable | What expenses are passed through | Surprise fees, unclear allocation |
| Liquidity and duration | Honest timeline and pacing fit | When could we exit | Overly optimistic exit plan |
| Governance rights | Reasonable visibility and protections | What information rights do we get | No reporting clarity, weak rights |
| Valuation policy | Clear methodology and frequency | How are marks set and reviewed | Marks that change without explanation |
| Operational burden | Reporting and documents are organized | What is the reporting package | PDF chaos, inconsistent statements |
| Concentration fit | Fits the portfolio and constraints | What sleeve is this in | Too large for its risk and liquidity |
A simple process: score the opportunity, then write down the top two reasons to invest and the top two reasons not to invest. Discuss both.
Monitoring and performance measurement: what to track, and how often
The best monitoring is simple, consistent, and honest about what you can know.
What a family office dashboard should show
- Cash and near-cash runway
- Exposure by asset class and by major themes
- Concentration by top holdings and by operating business exposure
- Private market commitments and unfunded amounts
- Pacing versus plan for private markets
- Performance by sleeve, with clear valuation dates for privates
- Major risks and what changed since the last review
A practical cadence
Monthly
Liquidity, public market exposures, and major changes in concentration.
Quarterly
Private market updates, commitment pacing, manager reviews, and key risk review.
Annually
Strategy review, policy updates, and deep manager diligence refresh.
A key mistake is false precision. Private market valuations lag. Treat them as estimates with dates, not real-time truth.
Operating model: the hidden determinant of strategy success
Strategy execution depends on operations.
Family offices often deal with:
- Multiple banks and custodians
- Alternative investment statements in PDFs and portals
- Different valuation dates across investments
- Multiple entities that need consolidated reporting
- Stakeholders who ask questions on different timelines
A strategy that assumes perfect data will fail. Build the operating model into the strategy:
- Define the close calendar
- Define document storage and naming rules
- Define who owns data ingestion and reconciliation
- Define how exceptions are tracked and resolved
- Define what “final” numbers mean and when they are locked
This is not busy work. It is how you prevent small reporting errors from becoming trust problems.
Where FundCount fits
Family offices often outgrow spreadsheets when they add multiple entities, alternative funds, and direct investments. At that point, strategy execution becomes a reporting and control challenge, not an investment idea challenge.
FundCount can help by centralizing investment accounting and reporting across entities, so holdings, capital activity, and ownership rollups stay consistent from quarter to quarter. This reduces time spent reconciling numbers across sources and makes it easier to produce consolidated views for family stakeholders and advisors.
If the office holds alternative funds, tools like AI Document Intelligence can reduce manual work by extracting and standardizing data from capital calls and statements, which supports cleaner workflows and fewer missed details. Reporting becomes easier to maintain when it is built on the same underlying records that support the books, rather than on ad hoc spreadsheets.
Practical implementation roadmap (30, 60, 90 days)
First 30 days
- Define objectives, constraints, and sleeve definitions
- Draft or refresh the investment policy statement
- Specify the reporting outputs you want each quarter
- Build a private market pacing plan at a high level
Days 31 to 60
- Create the private investment scorecard and decision memo templates
- Define monitoring cadence and dashboard metrics
- Document data sources and the close calendar
- Clarify roles and approval limits
Days 61 to 90
- Run one full quarterly cycle using the templates
- Review where reporting breaks and fix the workflow
- Calibrate allocation ranges based on real liquidity behavior
- Lock a repeatable process for private deal evaluation and reporting
FAQ
How do family offices invest?
They typically invest across public markets, private markets, and real assets, often using a sleeve approach. Implementation can include funds, co-investments, and direct deals, depending on team capacity and governance.
What is a family office investing?
A family office invests the family’s capital across assets that match long-term goals, liquidity needs, and values. That can include public equities, fixed income, real estate, private equity, private credit, and venture, among others.
What are family offices investing in?
Many family offices invest in a mix of public assets for liquidity and growth, plus private markets and real assets for long-duration exposure. The exact mix depends on the family’s objectives and constraints.
Do family offices invest in startups?
Yes. Many invest through venture funds, co-investments, or direct deals. The key is sizing, governance, and a plan for follow-on capital needs.
How do family offices manage liquidity if they invest in private markets?
They use pacing plans, maintain a liquidity sleeve, and monitor commitments and unfunded amounts. The goal is to avoid being forced sellers of public assets to meet capital calls.
What is family office impact investing?
It is investing with intentional social or environmental outcomes alongside financial returns. It can be implemented through screening, thematic allocations, or catalytic capital, but it should be defined and measured to avoid confusion.
