Family offices’ interest in UK investment and distressed situations on the rise

Appetite among family offices for UK investments and their interest in distressed and special situations have risen over the past 12 months, while willingness to back managers with short track records has fallen, analysis from AYU has found.

The global private members’ club for family offices and investment professionals assessed its family office members’ appetite over the past year, noting that while UK investment and distressed situations were rising up the agenda, demand for first-time funds and managers with short track records had declined.

The proportion of family offices looking to invest in distressed and special situations increased from 10 per cent to 18.2 per cent over the year to September 2026.

Meanwhile, the share of family offices seeking UK investments also increased, rising from 23.4 per cent to 30.8 per cent over the same period.

The shift towards UK investment was most evident among UK-based investors, increasing from 25 per cent to 35.1 per cent, while increases among US-based and other international investors were smaller.

AYU said family offices provided a particularly valuable indicator of market sentiment, as while they are largely insulated from short-term movements that influence retail investors, their investment outlook tended to be more dynamic and opportunistic than many institutional investors.

Its study also recorded three separate measures of appetite for newer managers, which all fell over the past 12 months.

The share of investors willing to back a manager with a track record of under two years fell from 34 per cent to 28.3 per cent.

Furthermore, the proportion willing to consider a first-time fund declined from 23.9 per cent to 19.2 per cent, and appetite for seeding managers fell from 36.4 per cent to 33 per cent.

AYU said these moves indicated a tightening environment for emerging managers, with families showing a stronger preference for established operators during a period of market uncertainty.

While the study found a narrowing appetite across most areas, private credit proved to be an exception.

The proportion of family office looking to invest in private credit increased from 19.1 per cent to 22 per cent, with Europe accounting for most of the gain.

“Anecdotally, we’re hearing that families see dislocation as both a defensive and opportunistic play,” said AYU CTO, Toby Abel.

“The data shows a clear pivot toward strategies that can capture value in stressed markets, and toward managers who have already proved themselves.”

AYU founder and CEO, Gus Morison, added: “Over the last year, families have increasingly been telling us a polarising story driven by predicted market disruption - they want to invest in strategies capitalising on the fast changing macro-economic and political environment, but they also want a safe, proven pair of hands on the wheel.

“So, elements on both sides think the UK offers the optimum market opportunity, but perhaps for different reasons.”

---