Epoch 45: Family Offices & Biotech

Investment Strategies & Relationship with Venture Capital

Hello Avatar! Welcome back for another week of biotech analysis. Today is Sunday, which means this is our Building Biotech newsletter that is focused on discussing biopharma strategy topics. This week we take a step back from pure science and therapeutics focused biotech and explore the world of capital allocation.  A large portion of life science venture capital originates from family wealth.  Today we will explore the world of family offices and for those of you on that side of the fence we will explore strategic questions such as wether to LP in VC funds for exposure, or build your own direct investment capability.  For those of you in the VC/Biotech world this will also be an excellent overview of one of the most common sources of capital used to fund biotech.

If you're not subbed yet click the link below.  Every Thursday we are out with our FREE public/private biotech market update. Sundays are the days we focus on forward looking strategy.  Monday’s are for public equity research.  Tomorrow we will focus on Biohaven (BHVN) where data from the IgG degrader (BHV-1300) Phase I SAD, MAD, SubQ data readout is imminent. With investor anticipation running high and market volatility expected (potential swings of +/- 65%), all eyes are on BHVN.

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Enough shilling for the day, lots to cover this week, let's get started!

Intro to Family Offices

Family offices have become an essential resource for ultra-wealthy families, providing a way to manage and grow wealth with a personalized touch. Unlike traditional investment firms, family offices are dedicated to the unique needs of a single family or a small group of families, allowing them to offer much more than basic investment services. These offices help families preserve wealth, plan for future generations, and make sure investments align with their values and long-term goals.

As wealth grows, so does the complexity of managing it effectively. Family offices step in to handle this complexity by offering a full suite of services that go beyond typical financial advice. They coordinate everything from investment strategies and tax planning to succession planning, philanthropy, and family governance. By bringing all these elements together under one roof, family offices help ensure that families not only protect their wealth but also stay true to their values and priorities across generations.

When it comes to investment strategies, family offices tend to take a long-term, diversified approach. They invest across multiple asset classes (certainly not just biotech), including public equities, private equity, fixed income, real estate, hedge funds, and private credit. Family offices are particularly known for their ability to invest patient capital, allowing them to take on illiquid investments such as private equity or direct real estate investments which may take years or even decades to mature. Their investment strategies are often shaped by a desire for stability, intergenerational wealth transfer, and a commitment to preserving the family legacy.

Today we will get into much more detail on the specifics of all of this, with a particular focus on venture capital and of course biotech.