Investment

Two big deals this week show the increasing power of family offices in the investment world

For some time family offices have competed with institutional investors for the best deals in private markets. Often they’ve had to settle for second best given their smaller budgets. But this is changing, and two deals this week confirm their growing clout in private markets. 

Kirkbi, the family office of the Kirk Kristiansen, Lego’s biggest shareholder, invested alongside Sony in a massive $2 billion deal for video game and software developer Epic Games. Each invested $1 billion, giving Kirkbi a 3% stake in the Maryland-based business, valued at more than $30 billion. One of Epic’s top online video games is the hugely popular Fortnite. 

The money will be invested in Epic Games’ efforts in the metaverse, which is increasingly one of the hottest parts of the tech sector. 

OK, Kirkbi is the main shareholder of Lego, so the deal is more of a classic old economy company buying into a cutting edge technology business. But the deal was done through a family office, and it shows how these groups are used increasingly by owners of family businesses to buy other assets. 

Also of importance this week was Athos, the family office of brothers Andreas and Thomas Strüngmann, buying biopharma group Formycon. The deal was convoluted, but it was worth €650 million, and it leaves Athos with a 26% stake in the listed group, based just outside of Munich. 

As various articles by Family Capital testify (here, here and here), Athos is arguably Europe’s most dynamic family office – certainly in the biotech and healthcare sectors. The Strüngmann brothers have also been big buyers of real estate. This is no doubt on the back of huge dividends from their stake in BioNTech, which, until recently, was one of the top-performing stocks anywhere, given its critical role in developing one of the first COVID-19 vaccines. 

The Kirkbi and Athos deals follow a few months after family office MSD Partners co-led a $930 million Series E funding round into Flexport, the hugely successful San Francisco-based logistics platform. Again, the MSD deal shows the growing power of family offices at the top of the private markets investment food chain. That trend will continue. 

 

  

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