The Rise of the Family Office as an Investor

Three main drivers for macro-economic growth for any country’s economy include accumulation/deployment of capital, increase in labor outputs, and technology advancement. AngelMD is focused on driving healthcare growth by both unlocking access to capital and supporting the very best healthcare technology advancements.

Family offices today are playing an increasing role in deployment of capital on a global scale. In 2008, an estimated 1,000 single-family offices were in the world. Less than a decade later,  Ernst & Young reports the number has grown to more than 10,000 family offices globally. Family Office Exchange says that, while most estimates peg the current number of family offices in the United States to somewhere between 3-5,000, the real figure could be closer to 6,000.  

Research conducted by Dominic Samuelson, CEO of Campden Wealth, suggests family offices currently hold assets in excess of $4 trillion. Family offices are now capable of making transactions that were traditionally reserved for big companies or large venture and private-equity firms, therefore making them a notable force in the marketplace.  

The Global Family Office Report shows more than a quarter of family offices (28%) report being engaged in impact investing (i.e. investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.) Two-fifths plan to increase their allocations this coming year, a push largely attributed to ethically-minded millennials moving up through the family ranks.

A major trend affecting future growth of family offices is to balance changing investment strategies for increased emphasis on direct minority-stake investments, yet more active participation in the strategic management of these investments versus rising operational costs and the need for specialist, more scarce talent.   

Impact investing by Family Offices is a natural fit on the AngelMD platform. Rather than building up staff to evaluate healthcare investment alternatives, Family Offices can rely upon the AngelMD network to source, evaluate and deploy capital to the best healthcare impact investments.

The JOBS Act created the regulatory framework for AngelMD’s syndicated investment model for accredited individuals. To be considered accredited, an investor must have a net worth of $1,000,000, excluding the value of their primary residence, or income of $200,000 each year for the past two years. In just over 24 months, AngelMD has been able to leverage our digital platform and network of accredited investors to execute 30 syndicate investments in leading healthcare startups.  

AngelMD physicians are able to play a key role in our syndicate investment vehicle by sourcing, vetting, scoring, and advising the best healthcare startups. A portion of the AngelMD physician membership also participates as investors and leaders in syndicate opportunities. This proven model, however, is materially enhanced when complemented by funds that are available to precede and/or follow-on to syndicated investments. This rationale underlies the creation of AngelMD’s Catalyst family of Funds.  

The Catalyst I LP fund leverages the network as an input to investment decisions made by each Fund Manager. Rather than investing in individual syndicates, family offices, institutional investors, and sovereign funds view AngelMD funds as the more efficient model for capital deployment. Over time, AngelMD will create a number of thematic funds that will deploy significantly more capital than our syndication model.

The AngelMD network of family office membership will continue to grow as they seek platforms that provide returns while simultaneously providing societal impact. Over time, we believe that the majority of our deployable capital will come through those relationships.

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