{"id":21974,"date":"2024-06-07T21:57:43","date_gmt":"2024-06-07T21:57:43","guid":{"rendered":"https:\/\/www.thinkadvisor.com\/2024\/06\/07\/wealthy-families-fuel-20b-private-equity-buyout-wave\/"},"modified":"2024-06-07T21:57:43","modified_gmt":"2024-06-07T21:57:43","slug":"wealthy-families-fuel-20b-private-equity-buyout-wave","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2024\/06\/07\/wealthy-families-fuel-20b-private-equity-buyout-wave\/","title":{"rendered":"Wealthy Families Fuel $20B Private Equity Buyout Wave"},"content":{"rendered":"
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More than a third of family office clients recently surveyed by UBS Group AG plan to increase their allocations to direct private equity opportunities, behind only developed-market equities as the most popular asset class.<\/p>\n

\"Global<\/figure>\n

The participation of private wealth underscores the growing sophistication of how the people behind the world\u2019s biggest fortunes are managing their money, as well as how many investment firms are increasingly tapping them as sources of capital.<\/p>\n

Blackstone Inc., KKR and Carlyle Group Inc. have already started dedicated platforms to serve the well-heeled, and the richest among them are able to become partners for some of those firms\u2019 most high-profile \u2014 and possibly most lucrative \u2014 deals.<\/p>\n

\u201cThey have the potential to take on long-term opportunities,\u201d Christina Wing, founder of advisory firm Wingspan Legacy Partners, said of the ultra-rich. \u201cThey are going to come in at the same terms as institutional investors.\u201d<\/p>\n

Deal Shift<\/h2>\n

The pace of dealmaking by wealthy families has been steadily increasing in recent years. When Brookfield Asset Management agreed to buy Network International Holdings Plc last year, Saudi Arabia\u2019s billionaire Olayan family contributed nearly a tenth of the \u00a32.2 billion ($2.8 billion) purchase price for the London-listed payments processor.<\/p>\n

In 2022, private equity firm EQT AB teamed up with the pharmaceutical billionaires in Germany\u2019s Struengmann family as it pursued a bid for Novartis AG\u2019s $25 billion generic drugs business, Bloomberg News reported at the time.<\/p>\n

Overall, the family led by identical twins Thomas and Andreas Struengmann has worked with the Swedish private equity giant on at least six major deals within the past decade, according to data compiled by Bloomberg.<\/p>\n

Past deals show the potentially outsized returns available from buyout deals involving publicly traded companies.<\/p>\n

Michael Dell transformed his technology empire after striking a deal with Silver Lake to take his namesake business private in 2013 through a $25 billion leveraged buyout, allowing him to reposition the Texas-based company outside the glare of public markets.<\/p>\n

It relisted five years later in stronger financial shape, with Dell\u2019s stake in the company he founded in his college bedroom now making up most of his $107.2 billion fortune, according to Bloomberg\u2019s wealth index.<\/p>\n

Other members of the world\u2019s wealthiest families are following suit. Reinold Geiger, the billionaire Austrian owner of L\u2019Occitane International SA, is trying to buy out minority shareholders in the skin-care company with financing from Blackstone and Goldman Sachs.<\/p>\n

The billionaire dynasty behind U.S. clothing retailer Nordstrom Inc. has been considering a similar move. And Rothschild & Co.\u2019s founding family bought out other investors in the storied bank last year with capital from several other wealthy clans, including the owners of luxury fashion house Chanel and Dassault Systemes SE.<\/p>\n

\u201cIt\u2019s some of the best capital for our banking colleagues,\u201d Goldman\u2019s Allaway said, referring to funds from the world\u2019s ultra-rich. It will \u201cbecome more of a permanent capital base for these type of transactions.\u201d<\/p>\n

(Image: Shutterstock)<\/em><\/p>\n

Copyright 2024 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n","protected":false},"excerpt":{"rendered":"

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