Maybe I'm just cynical, but at my MM, we have rarely seen family offices compete for deals in auctions and it seems there are more and more being formed weekly, if not daily. I'm astounded at how much capital is now going into the market to try and compete with traditional PE and strategics, particularly in the MM (I see some value in the LMM and even more in the sub $10mm EV space).
Now, one pitch from some family offices has been "we aren't trying to compete with PE because we are different (e.g. longer holds, less transactional, more passive ownership, better people, etc.)". But, let's be realistic here, there are only so many unbanked deals that happen in the MM (and even LMM), and to assume that they are going to fall into their laps seems quite ignorant.
Now, some have assembled teams that are focused on business development and trying to identify and execute one-on-one with family-owned and closely-held businesses. But, they are spending millions of dollars chasing deal flow with an expectation that they will actually close proprietary deal(s) and that these investments will actually perform well.
On the other hand, they are going into auctions with conservative capital structures and playing the "better partner" scenario, which is difficult in a market where leverage is dictating double digit returns on almost any decent asset.
I get that family offices can save significant fees if they start doing deals direct, but I just don't think they realize just how hard that is. The patient capital approach will resonate in certain deals and with certain management teams, but with the proliferation of quantity of family offices, there will likely be several to the table if that is an optimal transaction partner.
Until they start differentiating themselves (e.g. Pritzker Rosewood, Metropolous), I don't see a rapid transformation for the majority of deals.
NOTE: Sorry for the rant and poor grammar, on a place post-pitch and tired af.