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Family offices are paying primary-stage prices for secondary-stage AI risk
Djoann Fal of Atlas Capital says the families he advises are skipping blind-pool venture funds to buy existing shares in AI leaders, at prices he admits leave them little room for outsized returns.
The Product Desk · Product desk
What happened
- Family offices are increasingly buying existing shares from current shareholders or doing their own direct deals, which gets them exposure without handing money to a fund manager for a decade.
- UBS's 2026 Global Family Office Report, covering 307 offices with an average net worth of $2.7 billion, found alternatives including private equity, venture and private credit at 42% of the average portfolio.
- Deloitte counted $5.5 trillion overseen by family offices in 2024 and projected at least $9.5 trillion by 2030.
- PwC put the peak of family office dealmaking in 2021, at 17,460 deals worth roughly $1.05 trillion globally.
- Activity is rebounding now, with family offices writing bigger checks on fewer deals, much of it in the secondary market.
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Why it matters
- cost Managers outside AI are paying for the rotation. Fal, whose clients mostly back climate investments, said he has never raised this much money in his life, all of it earmarked for AI, while those clients struggle to raise at all.
- constraint Skipping the fund also skips the diversification. A single-name position puts the family office's outcome on one company, where a blind-pool commitment would have spread it over dozens.
- decision A founder or CFO fielding one of these approaches has to establish what the buyer expects in governance terms before signing, because the public case for these deals is made on price and exposure.
- contradiction Fal credits a new generation of family offices with a higher appetite for risk than their predecessors. The same structures drew the same buyers before the last reversal, and that appetite has not been tested yet.
The choice Fal describes is between a green energy position a family would hold for years and an AI deal that could pay the same multiple in a quarter. "They're just going to invest in the AI deal that does 3x in 3 months," Fal said [3][2]. That route avoids the blind-pool commitment, where an investor hands a fund manager money without knowing which companies it will back. "They have more dry powder to chase single-name deals," he said [5]. "Right now, the single names they want are the AI leaders" [6].
Fal's account of that market contradicts itself. He calls the secondary market the most "de-risked" asset in venture capital right now, since buyers are often backing companies that already have customer traction and revenue proof [14]. He also said family offices have no problem paying "primary-style prices" for "secondary-stage risk," even if it leaves them with "little room for outsized returns" [18].
Angelina Hu, head of investor relations at Bridge Funding Global, said the secondary market lets a family office get exposure to one private company without "taking exposure across 20-30 companies" [15]. Read from the buyer's side, that means one company's outcome carries the whole position.
There is a record for this. UBS's own tracking had direct deals at 13% of the average family office portfolio in 2021, up from 9% in 2019 [9]. The 2021 peak works out at about $60 million per deal [21]. Direct and M&A activity then fell 53% in the 18 months to late 2023, as rates rose and some of those bets returned less than hoped [11], and by the first half of 2025 overall family office deal volume was at its lowest point in a decade [12].
For anyone on the receiving end of these approaches, the question is what arrives with the money. TechCrunch's account describes families buying existing shares from existing shareholders and doing their own direct deals. It does not say what board seats or information rights travel with the stock [22].
Two questions carry the decision either way. The first is what has to happen inside the company for a buyer at today's price to clear a return, when the advisor placing the deals already puts the headroom near zero. The second is whether this holder stays when rates move, since the last cohort to load up on direct deals cut them faster than it built them. Bruce K. Lee, founder of Keebeck Wealth Management, described the current posture this way: "Family offices see the risk, but don't want to miss the opportunity" [16].
What to watch
- Whether UBS's next family office report shows direct deals climbing back above the 13% portfolio share it recorded in 2021.
- Whether PwC's deal study shows the current rebound in check sizes holding through the next move in rates.
- Whether Fal's climate-focused clients raise anything while his AI-earmarked capital keeps coming in.