From data centres to Israeli startups, discover the unconventional investments generating asymmetric returns for Australia’s most successful family dynasties.
Australia’s wealthiest families are quietly rewriting the investment rulebook, abandoning traditional strategies for sophisticated private deals that generate returns of 20% or more whilst ordinary investors struggle with volatile public markets.
The most successful families have developed what Royce Stone Capital CEO Tarek Omar describes as “unique investment strategies that achieve asymmetric returns to the level of risk that is involved.”
What’s happening: Australia’s leading family offices are dramatically shifting their investment strategies, moving away from traditional public markets and property into private credit, direct lending, and offshore operations. Research shows Australia now has approximately 2,000 family businesses, representing a 150% increase over the past decade. These wealthy families are building in-house investment capabilities, with some establishing their own lending funds deploying hundreds of millions in capital.
Why this matters: This represents a fundamental shift in how Australia’s wealthiest families preserve and grow generational wealth. Their moves signal growing concerns about sovereign risk, property taxation, and public market volatility. The strategies they’re employing, from patient capital deployment to risk underwriting, offer insights into alternative investment approaches that achieve “asymmetric returns” without proportional risk increases.
Research by KPMG reveals Australia now has about 2,000 family businesses, a 150% increase over the past decade. But for these family offices, making money isn’t only the goal, they must also manage generational changes which can often make or break a family dynasty.
Private over public
A growing number of high performing family offices are moving larger portions of their wealth from public equities to private credit and direct private equity investments.
The shift reflects their ability to deploy what Omar calls “patient capital”, funding that “isn’t forced to act due to market forces, debt positions nor is it relied upon for income.”
Building investment teams
Several family offices are building in-house investment capabilities rather than relying on external fund managers. The Lederer family office exemplifies this trend, establishing its own private credit lending fund for property loans through 3 Capital.
The family has built an in-house team that has deployed more than $200 million in loans, directly overseen by the family. As the investments have grown, it has opened up its funds to co-investment from other high net worth investors in its network.
Offshore safe havens
Sovereign risk concerns are driving families offshore. “Recent anti-Jewish sentiment, the threat of a currency reset, higher taxes and geopolitical conflicts is causing several families to look for offshore safe havens to relocate, and to minimise tax,” Omar notes.
This isn’t just an Australian phenomenon. At least one family office has moved its base permanently to the UAE after civil unrest in its home country. A second Australian family is creating a new base of operations in emerging Asian markets, whilst a third family is moving significant wealth to the UAE.
Property concerns grow
Traditional property investments are losing their appeal as government taxation increases. “What is the easiest thing for government to tax? The answer is property!” Omar warns, citing increased land taxes in Victoria and threats of unrealised gain taxes.
Furthermore, luxury property investments overseas no longer command premiums in certain blue chip cities, as crime rates and social fabric deteriorates. This has family offices moving capital from property into private businesses which can operate globally.
Patient capital advantage
Family offices can afford to be inconvenienced when directly funding private credit transactions. Should a business encounter trouble, they can wait for rehabilitation whilst charging penalty interest or deploy further capital to remedy situations.
Their risk underwriting capabilities allow them to take riskier investments whilst charging risk premiums. In second mortgage loans, for example, a family office can payout the first mortgage holder if needed, converting their position from second to first mortgage and gaining asset control.
The investments these families are making range from data centres requiring specific proximity to power infrastructure, to Israeli tech startups focusing on fintech and trading platforms. Some are vertically integrating construction businesses, purchasing subcontractors and suppliers to reduce costs and increase margins.
As Omar concludes: “The portfolios of Australia’s leading family offices don’t follow trends, they follow principles: active control, capital preservation, unique investment strategies and moving with market demands.”
Tarek Omar is CEO and Partner of Royce Stone Capital
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