Robotics and artificial intelligence are emerging as a new investment theme among family-backed investors as tech advances in both areas begin to make a big difference to their viability.
Last week, Pohlad Companies, an investment group owned by the US-based Pohlad family, acquired robotics group PaR Systems, which is involved in the manufacturer of robotic-automation and materials-handling equipment. The Pohlad family are probably best-known for owning the baseball team, Minnesota Twins, but they have been big investors in other sectors.
“We want to invest in companies that make a difference now and in the future,” said Robert Pohlad, one of the family owners of Pohland Companies, in a statement on the acquisition. “PaR Systems not only fits that criteria but allow us to expand into a new business line that we believe has great long-term potential.”
And earlier this year, Wu Capital, the family office of Yajun Wu, the chairwoman of Longfor Properties, invested in a China-based artificial intelligence and education startup called Liulishuo.
The theme of companies making a difference in the future obviously fits well with the robotics and AI sectors - and family investment groups also like the long-term potential of the sector. “Family offices are looking to get into ‘deeptech’ types of opportunities,” says Ilian Iliev, managing director of EcoMachines Ventures, an investment group specialising in the two sectors.
He adds: “When it comes to investing in the sector, family offices tend to look for a strong lead investor, either a venture capital group with experience in the sectors, and/or invest alongside a corporate venturing group, which also has deep experience in the sectors.”
Iliev also says he sees family offices attracted to the sectors where there is a synergistic relationship with the core business. “For example, if the family have a logistics business, they are likely to be interested in warehouse or transportation-related robotics,” he says.
Robotics and AI investing are also likely to appeal to next-generation members of the family, says Iliev. “They may see it as novel, exciting, and about the future. And they may use their family network to accelerate their efforts in these areas.” A case in point is 37-year-old Bhavin Turakhia, a serial tech entrepreneur, billionaire, and CEO and co-founder of Directi, who last year said he plans to set up a family office and invest in artificial intelligence.
Big advances in both sectors are expected to happen in the next few years, which will likely further prompt family office investor interest.