High Net Worth, Family Offices M&A Deals Up 13 Per Cent

Rising Trends in Family Office Mergers and Acquisitions

In the ever-evolving landscape of wealth management, family offices are increasingly making their mark through mergers and acquisitions (M&A). Recent data from the law firm Pinsent Masons reveals a noteworthy 13% increase in M&A deals involving high-net-worth individuals (HNWIs) and family offices in the UK over the past year. This trend underscores the growing influence of private investors in the M&A sphere and highlights the strategic roles family offices are playing.

Understanding the Surge

The analysis by Pinsent Masons shows that the number of M&A deals in the UK involving HNWIs and family offices rose from 30 in the previous year to 34 in 2024/25. More striking, however, is the 277% increase in the total disclosed value of these deals, which climbed from £450 million to £1.7 billion. This substantial rise indicates not just a greater number of transactions, but also larger-scale investments.

Sunjay Malhotra, a partner at Pinsent Masons, attributes this upward trajectory to the desire of many wealthy individuals to lead or co-invest in M&A transactions. By doing so, they can acquire private assets while avoiding the management and performance fees typically associated with private equity funds. This approach also allows them to participate in management decisions, aligning with their entrepreneurial backgrounds.

Family Offices as Strategic Investors

Family offices are increasingly recognized as agile and strategic investors. They are particularly adept at swiftly executing transactions, which can make them attractive partners in M&A deals. Unlike institutional investors, family offices can offer quicker due diligence processes, which is appealing to sellers looking for efficiency.

Moreover, family offices are diversifying their portfolios by targeting a mix of trophy assets such as sports teams and pragmatic investments that promise steady returns. This diversification strategy not only spreads risk but also increases exposure to high-growth sectors.

Cross-Border Dynamics

A significant driver of the increased M&A activity is the renewed interest from US-based investors in UK companies. Historically known for a higher risk tolerance, US investors have been actively seeking opportunities in the UK market. This influx of capital is a testament to the UK's ongoing innovation and its ability to produce companies with global appeal.

Notable Transactions:

- The Friedkin Group, Dan Friedkin's family office, acquired a majority stake in Everton Football Club.

- Ryan Reynolds and Rob McElhenney expanded their portfolio by acquiring Wrexham Lager Beer.

- Kuwaiti HNW Hussain AlSaeed took a majority stake in Bristol Rovers.

Implications for Family Offices

For family offices, these trends highlight the importance of being proactive in identifying M&A opportunities. As the landscape becomes increasingly competitive, having a well-defined investment strategy is crucial. Family offices should focus on sectors where they can bring not just capital, but also strategic value.

Key Takeaways for Family Offices:

- Leverage Quick Decision-Making: Family offices can capitalize on their ability to make swift decisions, setting them apart from larger institutional investors.

- Diversify Investments: Balancing high-profile and pragmatic investments can mitigate risks and enhance returns.

- Stay Informed on Tax Policies: Changes in tax regulations, such as those concerning non-domicile status and inheritance taxes, can impact investment strategies.

- Foster Global Partnerships: Engaging with international investors can open new avenues for cross-border deals and collaborations.

Looking Ahead

As family offices continue to assert their influence in the M&A arena, they must remain agile and informed. By understanding the broader economic and regulatory landscape, family offices can better navigate the complexities of modern wealth management. The coming years will likely see family offices not just as participants in M&A deals but as pivotal players shaping the future of global investment.