Private company deals are increasingly being dominated by family offices.

• High-net-worth families' in-house investment and service firms, known as family offices, are increasingly self-assured in identifying and negotiating their own private equity transactions.
• According to a survey by Bastiat Partners and Kharis Capital, half of family offices plan to invest directly in a private company without a private equity fund over the next two years.

The original article was published in CNBC's Inside Wealth newsletter with Robert Frank, providing a weekly guide for high-net-worth investors and consumers. To receive future editions, subscribe and have them delivered directly to your email inbox.

Private companies are increasingly attracting direct investment from family offices, bypassing private equity funds, according to a recent survey.

Over the next two years, half of family offices plan to invest in private companies directly, without the use of private equity funds, according to a survey conducted by Bastiat Partners and Kharis Capital.

Family offices, founded by entrepreneurs who started their own companies, are becoming more confident in finding and negotiating their own private equity deals as they grow in size and sophistication. They often like to invest in similar private companies and leverage their expertise.

According to the report, more than half of family offices surveyed prefer doing direct deals through syndicates, where other investors take the lead, indicating a cautious approach and reliance on the expertise of established sponsors.

Private markets are increasingly acknowledging family offices as a formidable economic force, as per the report.

As family offices increasingly engage in direct deals, they face the challenge of managing "deal flow," or the high volume of potential deals. With most deals being unappealing or unsuitable, family offices may sift through 10 or more deals for every one that pans out, reports indicate.

Family offices prioritize privacy and prefer to remain anonymous to the public, which limits their exposure to potential investments and deal offerings. Despite this, 20% of family offices surveyed identified "quality deal flow" as a top concern.

Another possible way to rewrite the sentence is: According to the report, one solution to attract deal flow is for family offices to increase their public profiles and network with one another. The survey reveals that 60% of respondents consider networking with other family offices to be important, and 74% are eager for more introductions.

Family offices face challenges with due diligence when doing direct deals, as they lack the infrastructure and resources to conduct thorough financial analysis and risk assessment, unlike private equity funds and companies.

Investment committees are being established by more family offices to formalize their deal process, as per a survey that found 54% of North American family offices have such committees.

Family offices are increasingly investing in niche and emerging asset classes such as real estate tax liens, fertility clinics, sale-leasebacks of real estate, whiskey aging, and litigation financing.

According to the report, these methods enable family offices to obtain private investments that provide high returns, cash yields, and low correlation with traditional markets.