Family offices stall deal-making during Iran conflict

In March, investment activities among family offices, which manage the wealth of ultra-high-net-worth families, took a significant hit as geopolitical tensions stemming from the conflict in Iran created uncertainty in the market. According to exclusive data from Fintrx, a private wealth intelligence platform, these family offices executed just 39 direct investments last month. This marks a 25% decline when adjusted for the number of days in February. Despite a general slowdown, some family offices are still making substantial investments. Notably, 25% of the investments made in March were part of mega-rounds, involving fundraising efforts exceeding $100 million. A highlight from this trend was Jeff Bezos' family office, which co-led a remarkable $1.03 billion seed round for Advanced Machine Intelligence, also known as AMI Labs. This innovative startup focuses on training artificial intelligence models using real-world sensory data rather than traditional text inputs. Additional high-profile investors, including former Google CEO Eric Schmidt and entrepreneur Mark Cuban, joined in this significant funding round. This pattern of fewer but more substantial deals is not limited to family offices; corporate investors are also leaning towards larger investments while reducing the overall number of transactions. Recent data from LSEG reveals that global mergers and acquisitions activity surged by 26% in total value year-over-year, reaching $1.2 trillion, though the number of deals fell by 17%. March also witnessed the lowest weekly performance for global M&A in over a year, with deal values dropping below $33 billion during the second week, according to LSEG's findings. Nevertheless, some family offices remain active participants in the investment landscape. For instance, Azim Premji's family office from India made at least four direct investments in March, including a leading role in a $450 million Series A round for Rhoda AI, another startup focused on advancing AI training techniques through extensive video data collection. The round also saw participation from billionaire investor John Doerr of Kleiner Perkins.