Surge in Family Offices: Investing in Healthcare

By Dennis Ford, Founder and CEO of Life Science Nation, Creator of the RESI Conference Series

In the ever-evolving finance and investment landscape, family offices have emerged as key players with the potential to drive significant change. These private wealth management firms, entrusted with managing the financial affairs of affluent families, have diversified their portfolios to include investments in a wide array of sectors. One sector that has garnered substantial attention in recent years is healthcare. The intersection of wealth preservation, a family’s medical health profile, and social impact have led many family offices to focus on investing in healthcare, a decision that promises financial returns, improves family legacy, and impacts global well-being.

LSN Collaboration with Stetson Family Office in 2019

LSN launched the Global Family Office BioForum in 2019 in collaboration with the Stetson Family Office to match Family Offices with angel groups, early-stage VCs, and KOLs to help identify and vet early-stage healthcare investment opportunities.  This collaboration was an extension of Chuck Stetson’s visionary initiative on educating family offices to understand how they can impact chronic diseases like Alzheimer’s, Cancer, and Diabetes/Obesity and tackle big global healthcare issues through his Healthcare Impact Foundation. Over the years, the Global Family Office BioForum has witnessed many of these relationships fostered at LSN’s RESI partnering events grow into strategic alliances and investment syndicates that have helped Family Offices move into the early stage healthcare arena.

The Dynamics of Family Offices

Family offices, by their structure, cater to the unique financial needs of high-net-worth families. With a long-term perspective, they prioritize wealth preservation, growth, and the passing down of wealth to future generations. This approach aligns well with the characteristics of the healthcare sector, which, given its essential nature, presents a range of investment opportunities with the potential for both social impact and financial gains. New drug development can take a decade or more and cost hundreds of millions of dollars, while devices, diagnostics, and digital health technology can be developed in three to five years for five to 15 million.  This breadth of choice allows a family office to execute its financial, healthcare, and social impact goals.

Why Healthcare?

As I have stated in the past, planet Earth is in the golden age of life science. Like other investor classes, family offices want a high return rate based on a timeline that matches their money management goals.   The healthcare industry is undergoing rapid transformation, driven by technological advancements, changing demographics, and evolving consumer expectations. These shifts create fertile ground for investment, with opportunities that span pharmaceuticals, biotechnology, medical devices, telemedicine, healthcare IT, and more. The demand for innovative solutions to global health challenges is greater than ever, and family offices are positioning themselves as key contributors to this transformation.

Balancing Profit and Purpose

Family offices are uniquely positioned to balance profit with purpose. Investing in healthcare allows them to pursue financial returns and contribute to improving healthcare access, quality, and affordability. Many family offices see healthcare investments to align their financial goals with their desire to positively enhance their family legacy and society.

Driving Innovation

One of the remarkable aspects of family offices’ involvement in healthcare is their ability to drive innovation. By injecting capital into early-stage startups and research initiatives, family offices provide crucial support to ventures that may otherwise struggle to secure funding. This backing accelerates the development of groundbreaking therapies, technologies, and services, ultimately benefiting patients worldwide.