Family office deal-making slides with some bright spots in Europe

Direct investments by family offices declined by 60% in July year-over-year, according to Fintrx, largely attributed to ongoing tariff uncertainty. This significant slowdown has prompted a strategic pivot among some ultra-high-net-worth private investment firms towards increased overseas allocations, particularly into European startups. Despite broader market turmoil, certain family offices, like Infinitas Capital, maintain an optimistic outlook on these international opportunities.

Analysis

A significant contraction in private market activity is evident among family offices, with direct investments plunging 60% in July on a year-over-year basis, according to Fintrx data. This sharp pullback is primarily attributed to heightened uncertainty surrounding international trade and tariffs, which has dampened deal-making appetite. In response to this environment, a notable strategic reallocation is underway, with some of these private investment vehicles increasing their exposure to overseas markets, specifically targeting European startups. While the overall market sentiment reflects caution, the presence of optimistic firms like Switzerland's Infinitas Capital suggests that select investors are identifying value in specific international segments despite the broader market turmoil.

Key Decisions for Investors

• Investors should closely monitor developments in trade policy and tariff negotiations, as these are clearly acting as a primary catalyst for capital allocation shifts within private markets.
• Consider evaluating opportunities in European early-stage companies, as the data indicates a strategic pivot by sophisticated family office capital towards this region.
• Maintain a cautious and highly selective approach, as the sharp overall decline in deal-making signals significant risk aversion despite pockets of opportunistic investment.