The Long and Short of Family Office Investing

Family offices are often portrayed as paragons of “patient capital,” stewards of dynastic wealth with investment horizons stretching across generations. Over the past two decades, this perception has solidified in financial circles, especially in Europe and the Middle East, where venerable family fortunes and new oil wealth alike are managed through such offices. It is commonly assumed that because family offices invest their own money, free from the constraints of outside shareholders or fund life cycles, they inherently take a long-term view.

Yet this view, while not baseless, is an oversimplification. In practice, family offices are a diverse lot – some do indeed behave like long-horizon custodians, but many others act opportunistically, making nimble moves in pursuit of nearer-term gains (andsimple.co, haynesboone.com). Understanding the origin and persistence of the “long-term investor” misconception, and how family offices actually operate, is crucial for anyone seeking to grasp the true dynamics of private capital in today’s markets.

Origins of the “Patient Capital” Narrative

The image of family offices as long-term investors has deep roots. Historically, the first family office – the Rockefellers’ in the late 19th century – was established explicitly to preserve and grow wealth across generations, setting a template for generational thinking (andsimple.co). In Europe, many single-family offices emerged from industrial or banking dynasties; their mandate was often to manage the family’s holdings and legacies indefinitely. Likewise, in the Middle East, prominent business families and royals set up offices to steward oil-era fortunes for their heirs. These origins naturally emphasized stability and long-range stewardship. Over the last 20 years, the sheer growth of family offices worldwide has also shone a spotlight on their supposed long-horizon approach. The number of single-family offices globally has surged from roughly 6,100 in 2019 to over 8,000 by 2024, with around 2,020 in Europe and 290 in the Middle East (deloitte.com). As these organizations proliferated, advisors and principals often touted a key differentiator: unlike typical investment funds, family offices “aren’t constrained by investment cycles and accelerated liquidity plays” and can remain stable, long-term investors (morganandwestfield.com).

This narrative has been reinforced by the way family offices are contrasted with other capital sources. In venture capital, for example, wealthy families are seen as providing “patient capital” that can support start-ups through their entire life cycle, rather than demanding an exit within 5–7 years. “The most obvious distinction between family offices and venture capital firms is the longer view taken by families,” notes one industry report (withersworldwide.com). Unlike VC funds on fixed timelines, a family office has no obligation to cash out if a business needs more time to mature (withersworldwide.com). Private equity sellers similarly have been told that a family buyer will not force a quick flip; a family office can hold a company indefinitely and “can continue owning a business as long as opportunities for growth remain” (morganandwestfield.com, morganandwestfield.com). In short, the promise of patient capital – capital that can wait out downturns and forego quick exits – became a defining sales pitch for family offices in the 2000s and 2010s.

Why the Long-Term Perception Endures

Several factors explain why the notion of family offices as inherently long-term investors has persisted. First is self-identity and marketing: family offices themselves often embrace the language of patience and legacy. Their overarching purpose is frequently described as “to grow and transfer wealth over generations” (andsimple.co). This framing, repeated in countless white papers and conferences, naturally paints family capital as futurity-minded. It is an image many families cultivate with pride. In the Middle East, for instance, newly formalized family offices explicitly aim to preserve wealth amid generational transitions and economic diversification. A Deloitte analysis notes that Gulf-based family offices “often adopt a long-term outlook” dedicated to wealth preservation (deloitte.com). Even as they modernize and professionalize, these offices invoke the rhetoric of steady stewardship as a core value.

Second, structural differences from institutional investors do give family offices more flexibility on timing, which observers often equate with patience. A family office has no outside limited partners demanding liquidity by year ten, no quarterly performance reports to appease pension boards. If markets look frothy, a family fund can simply sit on cash – an option that traditional fund managers, who must deploy committed capital, often lack (withersworldwide.com). During the late 2010s, many family offices touted their freedom to refrain from investing at all if conditions weren’t right, something that “VC funds tend not to have the luxury” of doing (withersworldwide.com). Family principals can also prioritize personal or strategic goals (like supporting a legacy business or a social cause) that don’t align with quick profits. All of this feeds the perception that family money is “patient money” by nature.

Finally, the misconception endures because, in certain high-profile cases, it has been true. Some single-family offices in Europe exemplify long-term ownership: consider the holding companies of old banking families or industrialists who still own the same assets decades on. In the Middle East, many family investment arms have traditionally favored tangible assets like real estate – an illiquid class that encourages holding for the long haul. Indeed, Middle Eastern family offices allocate significantly more to real estate (on average 15% of portfolios) than their global peers (empaxis.com), reflecting a cultural comfort with property as a multi-generational store of value. These examples reinforce the stereotype. When family-backed investors do make headlines, it is often for anchor investments held through thick and thin or for quietly backing an entrepreneur they believe in for the long run (nasdaq.com). Such stories make “patient capital” sound like a universal trait of the species.

A More Complex Reality: Opportunism and Varied Horizons

In practice, family offices are far from monolithic, and many depart from the romantic notion of the perpetually patient investor. Industry insiders have long noted that family offices may be extremely opportunistic in deploying capital, moving faster and more flexibly than institutional peers (andsimple.co). Freed from bureaucratic investment committees and quarterly mandates, a family office might just as readily chase a short-term trade as hold an asset for 20 years. “All these families are very opportunistic,” one advisor remarked of her family office clients (haynesboone.com) – a statement echoed by many who work with the nouveau riche tech families of Silicon Valley or the deal-hungry conglomerate heirs of Asia.

Empirical evidence bears this out. During the market turmoil of early 2020, rather than simply riding out the storm, a majority of family offices traded decisively and tactically. According to UBS, two-thirds of family offices globally executed major portfolio shifts amid the COVID-19 shock, with 65% of them switching up to 15% of their portfolios within a matter of weeks (hkifoa.com). These offices split into two camps: some pounced on “oversold” assets to grab bargains, while others quickly cut risk by raising cash or buying gold (hkifoa.com). In both cases, they behaved as active managers seizing a moment, not as passive holders content to “wait it out.” As one European chief investment officer put it, having the conviction to act during the March 2020 sell-off – to “really put your money where your convictions were” – was what “helped us out as a family office” (hkifoa.com). Such tactical agility is indistinguishable from the behavior of a sharp-eyed hedge fund.

Indeed, some family offices essentially operate like hedge funds in disguise. In the wake of post-2008 regulations, a number of famed short-term trading shops converted into family offices to escape regulatory scrutiny (familywealthreport.com). George Soros’s Soros Fund Management, for example, returned external capital and became a family office in 2011 – but it did not suddenly adopt a buy-and-hold ethos. It continues to engage in sophisticated, rapid-fire trades (even running afoul of Hong Kong regulators for a naked short-selling incident) (familywealthreport.com, familywealthreport.com). Likewise, the family offices of other ex-hedge fund titans (Stanley Druckenmiller’s Duquesne, or Alan Howard’s firm) retain a trading mentality, pursuing macro bets and quick arbitrage opportunities. Many large single-family offices also use prime brokerage services just as hedge funds do. A prime broker notes that today “many family offices operate in the same markets – and often with similar scale and sophistication – as hedge funds”(marex.com). The only real difference is whose money is at play.

Even among more conventional family offices, return expectations can be as demanding as any investor’s. The notion that family principals gladly accept lower returns for the sake of patience is not universally true. “Sometimes people think…we accept lower returns, and then they use the words ‘patient capital’, which drives me a bit nuts,” confessed Paul Carbone, managing partner of Pritzker Private Capital (peievents.com). His firm – the investment arm of one of America’s wealthiest families – aims to earn the same rate of return on a 15-year hold as on a 5-year hold, by relentlessly creating value each year (peievents.com). Similarly, Mark Sotir, who ran Sam Zell’s family investment office, bristled at the “patient” label. “Long-term capital is not patient capital,” he argued – if anything, long horizon investors must be more vigilant, since “if you’re not buying, you’re selling, every day” (peievents.com). In other words, having the ability to hold an asset indefinitely does not mean one sits idle; Zell’s team, known for opportunistically trading billions in real estate, believed in constant active management even during a 15-year ownership period. These views underscore that family offices expect performance. They may not have to answer to outside stakeholders, but they still answer to the family – and few wealthy families are inclined to watch their money languish.

Single-Family vs. Multi-Family Offices: Diverging Practices

Part of the diversity in family office behavior stems from their structural differences. Broadly, there are two models: the single-family office (SFO), serving one ultra-wealthy family, and the multi-family office (MFO), which is a wealth manager for several families under one roof. Each comes with distinct governance, goals, and constraints that influence investment horizons.

Single-family offices tend to be highly tailored and agile organizations. They answer only to the founding family, allowing for bespoke strategies and quick decision-making. An SFO’s governance might involve a family board or patriarch/matriarch calling the shots, often advised by a small team of investment professionals.

Because they manage one balance sheet, SFOs can afford to be bold and idiosyncratic. If the family principal has a conviction (say, to double down on tech stocks or to buy a football club), the SFO can execute swiftly without needing broad consensus. This focus often results in a proactive, even entrepreneurial, approach to investments. Specialists within a single-family office continuously scan for opportunities and “make timely decisions” to capitalize on emerging trends, adjusting strategies swiftly as conditions change (arrowrootfamilyoffice.com).

In other words, an SFO’s vaunted long-term perspective is complemented by a capacity for short-term maneuvering in service of the family’s ultimate goals. That goal could indeed be long-term wealth preservation – many SFOs prioritize protecting capital for future generations – but even then they may tactically trade around positions or seek opportunistic entries and exits to enhance the legacy portfolio.

Multi-family offices, by contrast, operate more like traditional financial institutions. Because they serve multiple unrelated families (often dozens or more), MFOs have a fiduciary duty to a broader client base and typically adopt more standardized investment policies. Governance is handled by professional managers and investment committees rather than a single family’s whim. This can impose a degree of caution and consistency in strategy.

Multi-family offices often focus on wealth preservation and steady growth, catering to affluent clients who prefer not to rock the boat. They achieve cost efficiency by pooling resources and offering a menu of services – from portfolio management to tax planning – across clients (arrowrootfamilyoffice.com). In terms of investment horizon, MFOs may lean somewhat conservative. They need to juggle varying risk appetites and liquidity needs of different families, which often means avoiding extremely illiquid bets or dramatic market timing.

For example, an MFO might rebalance client portfolios on schedule and stick to strategic allocations, rather than swing the entire ship to cash on a hunch. In general, governance and client expectations keep MFOs closer to the middle of the road: rarely as lightning-quick as a dedicated single-family office can be, but also unlikely to lock into something that can’t be unwound if one of the families demands cash for a new yacht or a child’s trust.

The flip side is that MFOs can indeed take a long view in the aggregate – they aim to be permanent capital managers across generations – but with a mandate to avoid undue risk. In practice, this might translate to lower leverage and modest return targets, as noted by advisors who say multi-family offices (and many single ones) focus more on wealth preservation than on maximizing IRRs (morganandwestfield.com, morganandwestfield.com).

The differences also show up in opportunistic behavior. A single-family office, especially one run by a hands-on wealth creator, may aggressively pursue a distressed asset or a short-term trading opportunity if it aligns with the principal’s view. By contrast, a multi-family office, needing to justify actions to multiple clients, may stick to opportunities that fit a broader strategy or are marketed through funds and co-investments. Notably, both types can and do invest indirectly via funds (private equity, hedge funds, venture funds) as well as directly.

But an SFO might be more inclined to set up its own direct deals or join club deals for quick strategic plays, whereas an MFO might allocate more to vetted external fund managers for diversification. In Europe and the Middle East, we have seen single-family offices of industrialist families making bold one-off acquisitions (a luxury hotel here, a tech startup there) for a quick value play, while multi-family offices in the same region steadily commit capital to large private equity funds or real estate funds with a 10-year outlook. The key distinction is often governance and incentives: the SFO answers to one family’s evolving ambitions; the MFO must deliver a service to many, which often means smoothing out the edges.

Examples of Divergence from the Long-Term Norm

Contrary to the one-size-fits-all myth, many family offices have shown shorter-term or opportunistic streaks. A salient example is Soros Fund Management, headquartered in New York but globally active, including in Europe and Asia. Now structured as a family office managing the Soros fortune, it continues the high-turnover macro trading that made George Soros famous – from currency speculation to short-selling stocks.

In 2018, Soros’s family office was even penalized by Hong Kong regulators for an aggressive short-term trade (illegal naked short-selling) aimed at quick profit (familywealthreport.com). Clearly, this is not a vehicle fixated on multi-decade holds. Another example is the late Sam Zell’s Equity Group Investments, effectively his family investment arm. Based in the US but investing internationally, EGI was known for opportunism in real estate and energy – Zell earned the nickname “the grave dancer” for swooping in on distressed assets at the right moment.

EGI might hold assets for a long time if value continued to grow, but Zell’s philosophy was that you must always be evaluating buy/sell decisions in real time (peievents.com). His firm would unload an asset in a heartbeat if the price was right, long-term plans notwithstanding.

In Europe, consider Pritzker Private Capital, which manages the fortune of the Pritzker family (better known for its legacy in industry and the Hyatt hotels). Pritzker’s team explicitly rejects the idea that their capital’s longevity equals complacency. They insist on short-term performance even during long-term holds, seeking to earn private-equity-like returns on each investment every year regardless of duration (peievents.com).

This mindset has led them to take a very hands-on approach in their portfolio companies, not hesitating to restructure or even sell earlier than anticipated if it means hitting their return benchmarks. On the other end of the spectrum, some Middle Eastern family offices that have sprung up in the last decade behave more like opportunistic conglomerates or merchant banks. For instance, a number of Gulf-based family investors have been active in private credit and mezzanine deals, drawn by the promise of quick, high yields.

In recent years of global uncertainty, Middle Eastern family offices showed an increased interest in short-term private credit funds and “seizing opportunistic deals to maximize returns,” even as they profess a long-term outlook (deloitte.com, haynesboone.com). Their ability to toggle between a strategic, patient posture and a tactical, opportunistic one is a defining feature of this new generation of family capital in the Gulf.

Asia provides its own twist. Many Asian family offices are first-generation (run by the wealth creators or their immediate heirs), and they often exhibit a trader’s mindset in managing wealth. A recent analysis of family investment in Asia noted that new family-backed funds in the region tend to be “small and opportunistic,” managed by savvy business people chasing outsized returns (wealthbriefingasia.com).

These families, having built empires in industries like tech or real estate, are not shy about active deal-making. It is common to see an Asian family office take an anchor stake in an IPO and then sell as soon as lock-up periods allow if the price has jumped – hardly the behavior of a passive long-term holder. At the same time, cultural factors play a role: first-generation Asian millionaires often want active control and fast results, reflecting the dynamism that created their wealth (wealthbriefingasia.com).

This can translate into shorter holding periods and a willingness to rotate investments quickly if expectations are not met. In contrast, some of the multi-family offices serving Asia’s older wealth (often via Hong Kong or Singapore) encourage a more measured approach, but even they report that many clients “plan to opportunistically invest in the next 12 months” whenever dislocations appear (goldmansachs.com). The upshot is a spectrum of behavior, even within the same region – defying any simple label of patient vs. impatient capital.

Why It Matters: Rethinking Capital Dynamics in Private Markets

Dispelling the myth of the universally long-term family office is more than just setting the record straight; it has real implications for private markets. Entrepreneurs, fund managers, and deal-makers often court family offices under the assumption that this money will be “stickier” and more forgiving than other capital. In some cases, that works out – a family office might indeed back a venture through multiple funding rounds with a decade-long vision, or hold a private equity stake well past the usual exit window.

But the persistence of the misconception can also lead to misalignments. A startup founder might take on a family office as an investor expecting patient support, only to find that the family’s priorities change in a few years (perhaps a new generation takes charge or external market conditions tempt them to cash out). Unlike an institution bound by fund agreements, a family investor can change course abruptly; understanding that risk is vital when structuring partnerships.

For private equity and M&A, knowing the true nature of a family office bidder is crucial. Some family offices will behave like strategic buyers, holding indefinitely, while others are quasi-financial buyers looking for a decent five-year return. The old adage, “if you’ve seen one family office, you’ve seen one family office,” holds: each is unique.

Assuming they are all long-term can be a mistake. The dynamics of capital in private markets – who is likely to refinance vs. who might bolt at the first sign of trouble – depend in part on these nuances. Family offices have become major players in private markets (managing an estimated $3.1 trillion as of mid-decade) (deloitte.com), outpacing many traditional institutions. Their true behavior, often an amalgam of long-range vision and short-term opportunism, adds a layer of unpredictability and complexity to deal-making.

In conclusion, the belief that family offices are inherently long-term investors persists due to historical legacy, self-promoting narratives, and some genuine structural advantages. However, a closer examination over the last twenty years – especially across Europe, the Middle East, and emerging Asia – reveals a far more complex reality.

Family offices run the gamut from quasi-endowments to quasi-hedge funds. Some will indeed hold an investment for a generation, content with steady compounding. Others will trade in and out, chasing alpha in the here and now. Many will do both, depending on the opportunity. Appreciating this duality is essential for anyone engaging with family offices or analyzing their role in private capital flows. In the world of private markets, capital may be patient at times, but it is rarely complacent – even when it bears the illustrious label of a family office.