Top 10 Family Offices Best for Venture Capital | Real Time Headlines

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up To receive future editions delivered directly to your inbox.

A new analysis shows that the top 10 startup investing family offices this year have made more than 150 investments in total, spanning everything from biotech and energy to cryptocurrencies and artificial intelligence.

CNBC teamed up with private wealth intelligence platform Fintrx to analyze the single-family offices that will make the most investments in private startups in 2024. Family offices, from Bernard Arnault’s Aglaé Ventures to Laurene Powell Jobs’ Emerson Collective and Peter Thiel’s Thiel Capital. It also reveals names little known outside the secretive world of family offices – the private investment arms of wealthy families – but which have become major players in the venture capital and private markets sectors.

The most active family office so far this year is Maelstrom, the Hong Kong-based family office of American investor Arthur Hayes, co-founder of cryptocurrency exchange BitMEX. According to Fintrx data, Maelstrom has invested in 22 private startups this year, more than any other family office in the database. The vast majority of Maelstrom’s investments are in blockchain technology, including Cytonic, Magma, Infinit, Solayer, BSX, Khalani and Term Labs.

Second in the top 10 is Motier Ventures, the family office and venture capital arm of Guillaume Houzé. Houzé, a scion of the legendary French dynasty that owns Galeries Lafayette and other retail giants, co-founded Motier in 2021 to invest in technology startups.

So far this year, Motier has invested in 21 startups. Its investments are mainly focused on artificial intelligence and blockchain, but also include publishing and advertising. These investments include Vibe.co, which has been called the “Google Ads of streaming”; Adaptive, a technology platform for the construction industry; and PayFlows, a fintech company. This is part of a US$220 million seed round for Holistic AI, a French generative artificial intelligence startup, and a US$30 million seed round for Flex AI, a Paris-based artificial intelligence computing company.

Motier is also an investor in two rounds of funding for fast-growing French artificial intelligence company Mistral, which raised more than $500 million last year from investors including Nvidia, Lightspeed and Andreesen Horowitz.

Tied for third place are Atinum Investment, a family office based in Seoul, South Korea, managed by an unknown family that invests mainly in software and artificial intelligence; Hillspire, the family of former Google CEO Eric Schmidt Office; and Emerson Collective.

Thiel Capital, tied for sixth place, has invested in Fantasy Chess, founded by 17-time world chess champion Magnus Carlsen, and Rhea Fertility, a Singaporean fertility clinic aggregator.

This list does not include investment amounts and may not include all transactions or all family offices as they are not required to disclose their investments. Fintrx compiles information from public and private sources sourced by its research team. For purposes of listing, a family office is defined as an investment vehicle or holding company of a single family or individual that does not manage funds for outside investors. Investments do not include real estate.

Overall, the rankings provide a rare window into the growing influence of family offices in the entrepreneurial capital world as they continue to grow in size, wealth and transaction complexity. According to a PwC report, by 2022, nearly one-third of start-up capital will come from family offices.

Artificial intelligence has become their favorite investment theme in 2024, and is likely to become their favorite investment theme again in 2025. More than three-quarters (or 78%) of family offices surveyed plan to invest in artificial intelligence in the next two to three years – the most investment of any category. As reported by CNBC reported beforeAglaé Ventures, a technology venture capital firm owned by the Arnault family office of LVMH CEO, has made a series of artificial intelligence investments this year. Jeff BezosBezos Expedition is also making several bets on artificial intelligence in 2024.

Family office advisors say serial investors like those on the top 10 list often view startups as idea labs where they can learn about cutting-edge technologies and markets. They can apply this knowledge to larger investments or their own companies.

For example, Schmidt’s family office Hillspire has made more than six investments in artificial intelligence this year, which also helps him make big bets on energy companies given the power requirements of artificial intelligence computing. Hillspire is an investor in a $900 million round in nuclear fusion startups Pacific Fusion and Sion Power.

While a large number of family offices invest in technology startups through venture capital funds, the deals on CNBC’s list are direct family office investments in startups.

The largest family offices such as Hillspire, Thiel or Aglaé have growing teams of transactional and technical experts who analyze investments and valuations. Smaller family offices and those that do not specialize in technology start-ups often invest through venture capital funds. One of the biggest trends among family offices is “co-investing,” which means the venture capital fund leads the investment and the family office invests as a partner, often with lower fees.

Nico Mizrahi, co-founder and general partner of Pattern Ventures, said it is increasingly risky for family offices to try to invest in technology startups on their own. The stock market decline in 2022 and early 2023 also drove down the valuations of many private technology companies, and the private technology market has since continued to experience increasing paper losses. There are also fewer exits due to a lack of IPOs, mergers and private equity buyouts, locking up cash.

“Some family offices are undisciplined and are drinking the Kool-Aid,” Mizrahi said. “I think they’ve overextended themselves and been a little too eager to chase the venture capital wave. There’s going to be some looking back; there’s going to be some companies disappearing “

Mizrahi said the best strategy, especially for smaller family offices, is to work with experienced managers who have expertise in technology start-ups.

“When you’re not 100 percent dedicated to doing something full-time, it’s really hard to get the best deals and generate the best returns,” he said. “You really have to do this with partners, with companies that are doing this all day long, networking and doing due diligence, background and background checks.”