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Slowly and slightly, family offices are opening up.

• Family offices, a bastion of dynastic wealth, aren't exactly known for their transparency. But that's slowly changing - giving the broader investment community a better line of sight into where the world's wealthiest families are investing.
• Through interviews with family office execs and industry insiders, Business Insider has learned this historically opaque corner of the wealth management universe is seeing slightly more light thanks to a desire to partake in more direct deals.
• "In order to get access to management teams, to take place in these corporate access meetings and days, companies have to know who you are," said Valerie Wong Fountain, the head of family office resources signature access at Morgan Stanley
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Family offices, the bastion of dynastic wealth, aren't exactly known for their transparency. But that's slowly changing, and the broader investment community could start better understanding where the world's wealthiest are investing and gaining influence.

These secretive private offices for the world's wealthiest families range in size and scope. They're "as quiet as you possibly could find, and they're writing extremely large checks," a descendant of the Rand McNally family told The Wall Street Journal in 2017.

And they're getting wealthier. Public markets have hit record highs and private equity has enjoyed its own growth in the decade post-financial crisis. Seventy percent of family offices surveyed by UBS and research provider Campden Wealth reported a rise in family wealth since 2018.

Family offices have leapt at the chance to gain a foothold in the private market with "direct deals" - the practice of investing directly in a company rather than through a vehicle like a fund - particularly as companies stay private longer and a hunt for yield against a backdrop of ultra-low interest rates has stoked demand for alternative investments.

On average, private equity now comprises 19%, or the second-largest share of family offices' portfolios after global equities, UBS and Campden Wealth estimate. That allocation is up from 8% five years ago, when it constituted the sixth-largest share of the average family office portfolio.

"In order to get access to management teams, to take place in these corporate access meetings and days, companies have to know who you are," said Valerie Wong Fountain, the head of family office resources signature access at Morgan Stanley, who oversees single family office and lifestyle advisory.

"They have to give us a little bit of visibility into who they are and why they're an important shareholder to actually warrant the management's team," Wong Fountain told us. "Some families believe that they can generate additional alpha by building out these direct private-investing teams."

Through interviews with family office executives and industry insiders, Business Insider has learned this historically opaque corner of the wealth management universe is seeing slightly more light than it has in the past thanks to the desire to partake in more direct deals.

Wong Fountain pointed to a family office gathering in midtown Manhattan, where she spoke with Business Insider last month, as an instance of family offices vying for more visibility into their operations - within reason.

Executives had agreed to come, share insights and meet with one another, though under "Chatham House Rules" conditions. That's an agreement, with century-old UK origins, where participants are free to use the information learned - though it cannot be attributed to the person who said it.

'A very different mindset'

Giving a complete picture of the global family office universe can be difficult.

Family offices - typically split between "single family" and "multi-family" - are not subject to the same regulation as more traditional wealth management advisory firms, and many representing a family's name and legacy simply don't want to share their secret sauce if they don't have to.

In the US, 337 multi-family offices are estimated to manage $768 billion in high-net-worth assets, growing at a compound annual growth rate of 14% in five years and outpacing high-net-worth channels like wirehouses and private banks, according to industry research firm Cerulli Associates.

Meanwhile Campden Wealth estimates there are 7,300 single family offices globally, with 42% housed in North America and 32% in Europe. Those firms oversaw some $5.9 trillion as of July.

Family offices are "absolutely" engaging in a growing number of direct deals, said Len Potter, president and chief investor of Wildcat Capital Management, the family office for TPG Capital founding partner David Bonderman.

Wildcat, for its part, has grown to some 20 staff members. But many family offices are far smaller. The entire ecosystem remains "very lean," Potter told us, as far as the size of these private firms.

"Families have a very different mindset than more traditional investors, and there's nobody out there catering to them," he said.

And some with ties to big tech - if, say, a member of that family office is a technology executive - are even looking more like venture capital firms, launching investments the way a typical VC firm would.

That very evolution is part of what led Citi Private Bank to shift its broader family office group to what is now known as the Citi Private Capital Group.

The group serves 1,400 family-owned businesses, family offices, and private capital firms in 77 countries.

As the number of direct deals grows, family offices are naturally sharing more narratives about themselves and having to tell stories about their investment strategies, said James Holder, global head of the Citi Private Capital Group.

"I would think about it in that context rather than the context of transparency or being coy; it's really about, if this is the way you want to execute, then you've got to be able to tell that story about why you're a great partner," Holder told us earlier this month.

"Some of the clients we deal with, of course, continue very much to self-identify as a family office. But many of them don't," he said, adding many have become increasingly sophisticated in their scale and investment strategies.

Nearly half of family offices UBS and Campden Wealth surveyed said last month that they had increased their governance and/or reporting structures, and 49% reported no change.

Marketers say they've seen for themselves that family offices are trying to get their narratives out there to gain that direct access to deal-making.

Jennifer Prosek, the founder and chief executive of public relations firm Prosek Partners, told us her team began fielding family offices' in-bound reputation management requests around 18 months to two years ago.

"We started to get a little bit of in-bound flow from family offices, which of course piqued my interest because it's sort of a new category of clients," she said in an interview.

Prosek added the next generation of family offices may also place a premium on socially conscious investments.

"The new generations care so much about meaning and purpose and social impact," she said. "I think there's also this demand in the new generations, who are going to going to take over the wealth, to do things differently."