Data sourced from Dakota Marketplace, the global LP and GP intelligence platform trusted by thousands of investment professionals. Learn More | Book a Demo
A family office takes your meeting, likes the strategy, and asks whether you offer co-investment. What they mean is that they would rather put capital into the deal than into the fund.
The usual explanation is that family offices want better economics, or that they have hired enough staff to underwrite deals themselves. Both are partly true. Neither is the main reason, and the main reason is more useful to understand because it is not going away.
They cannot get their money out of funds.
In this article, we’ll cover the crossover that happened in family office portfolios this year, the liquidity problem driving it, what Dakota’s family office deal data shows across the second half of 2026, and what all of it changes about how you approach the channel.
Direct Investing Passed Fund Investing This Year
Campden Wealth and RBC surveyed 155 single family offices for their North America Family Office Report 2026. Direct investments, active and passive combined, now average 45% of private markets portfolios. Funds account for 36%.
A year earlier those figures were 33% direct and 48% funds.
That is a crossover inside twelve months, not a drift. The fund share fell twelve points and the direct share rose twelve, and the two lines swapped positions in a single reporting cycle.
Citi Wealth’s 2026 Global Family Office Report, drawn from 351 offices across more than 40 countries, points the same way. Seventy-five percent invest directly, 40% expect to increase that activity, and 8% expect to reduce it. Pre-IPO deals are now a stated direct focus for 40% of respondents, up from 22%.
The Reason Is the Exit, Not the Returns
The instinct is to read this as family offices chasing better net returns by cutting out the fee layer. The surveys say something different.
Franklin Templeton data cited in a study by IE University’s Center for Families in Business puts the annual private equity distribution rate at roughly 13%, down from about 23% in 2021. Capital that used to come back is not coming back on the same schedule.
Family offices are experiencing that directly. In the Campden Wealth and RBC data, nearly one in five private markets investors tried to exit a fund position over the past year. Of the 15 offices that attempted it, 47% could not complete the exit as expected and half ran into caps or restrictions. The sample is small and worth treating as indicative, but the direction is consistent with everything else in the report.
Beth Francis, managing director and head of client delivery for RBC’s Global Investment Office, put it plainly: “Offices are increasingly choosing direct investments because they want control over when and how capital comes back.”
That is the mechanism. Not fee aversion, not overconfidence in their own underwriting. Control over timing.
It is worth noting that conviction in the asset class itself has not collapsed. More than eight in ten of the Campden Wealth respondents expect direct private equity returns over the next two to five years to match or exceed 2025, the strongest forward view of any asset class in the report. They want the exposure. They want a different route to it.
What the Deal Data Shows
Dakota Marketplace tracked 73 family office direct investments in June, 61 in July, 53 in August and 75 in September.
September was the strongest month of the second half. Information Technology led with 20 transactions, up from 15 in August. Healthcare rose to 14 from six, and Industrials to 12 from eight.
The month’s largest deal involving family office backers was DFO Management, Michael Dell’s family office, acquiring a majority stake in insurance distribution firm The Baldwin Group alongside Sequence Holdings, in an all-cash transaction valued at roughly $7.7B including $3.1B of net debt.
Below that, the pattern is a handful of offices running what look like programmes rather than opportunistic one-offs. Premji Invest joined a $311M Series E for Enveda and co-led rounds for CScale and BigHat Biosciences. Duquesne Family Office participated in two rounds in the month. Doerr Capital co-led two.
See which family offices are running direct programmes and which still allocate through funds, book a demo of Dakota Marketplace.
Co-Investment Is Not the Part That’s Growing
Here is the nuance that matters for anyone building a response to this trend.
In the Campden Wealth data, co-investments held flat at 10% of private markets portfolios while direct investing rose twelve points. The shift is into direct deals that family offices source and underwrite themselves, not into co-investment alongside managers.
That distinction has real consequences. Offering co-investment rights alongside your fund is a reasonable product decision, but it does not address what is actually driving the shift. A co-investment still ties the family office’s capital to your timeline and your exit, which is the thing they are trying to get away from.
Dakota Marketplace tracks 5,200+ family office accounts globally, with 700+ flagged as participating in co-investments. Roughly one in seven. Direct investing is accelerating, but it is concentrated among offices with the staff and deal flow to run it, and the rest of the channel still needs managers.
What This Changes for Fund Managers
Segment before you pitch. An office running a direct programme and an office allocating through funds are different prospects, and the 5,200+ accounts in the channel are not one audience.
Take the liquidity point seriously rather than defensively. If distributions are the real objection, then fund terms, expected hold periods and secondary options are more relevant to the conversation than track record, and a manager who can speak credibly to the timing of capital return has an advantage over one who cannot.
Do not assume co-investment solves it. It is worth offering, and it will matter to some offices, but the data says the growth is in deals family offices run themselves.
And recognise what is still there. Six in seven family offices continue to allocate through funds, and attention across the industry is shifting toward the direct investors. That makes the fund-allocating majority somewhat less contested than it was.
Finding Direct Investors in Dakota Marketplace
Dakota Marketplace covers 5,200+ family office accounts with co-investment participation flagged at the account level, alongside direct investment activity tracked monthly, prior commitment history, investment preferences and verified contacts.
That lets you split the channel into the offices that want deals and the offices that want funds before you spend a quarter finding out.
Book a demo of Dakota Marketplace.
