With experts predicting a robust year for private equity deal-making thanks to runoff from last year’s megadeals and an overall positive outlook, attorneys should branch out when seeking new clients because the rise of nontraditional investors with the ability to truly compete for assets will only continue to accelerate.
Howard Berkower, a partner with the corporate practice at McCarter & English LLP, said the rise of family offices and other nontraditional investors will likely affect prices because there’s nothing holding them back from topping a rival bidder’s offer.
Additionally, he noted that wealthy families often “stick within their own knitting,” meaning that if they made their money in a given sector, they will be more apt to stick to acquisitions within that industry.
He said that an increase in the influence of family offices is no surprise considering the overall belief by those in the know that the market in 2016 will be “fairly robust for private equity.”
“There’s a continuing trend towards family offices and other types of nontraditional private equity players,” he added. “Which, to some extent, suggests that families that have been very successful are good stewards of businesses.”