Family offices are becoming pivotal players in MENA’s investment landscape, but their strategies are evolving fast—and not without risks. This series explores the shifts that shape family office behaviour. Together, these articles map the changing role of family wealth in backing the region’s innovation economy.

Venture studios and deeptech are increasingly attracting family offices with their blend of legacy wealth and entrepreneurial ambition. These asset classes promise early access to disruptive innovation, but they also bring structural challenges and misconceptions. The reality is that without discipline and expertise, family offices risk chasing narratives rather than building resilient portfolios.

The allure and ambiguity of venture studios

Venture studios sell a compelling story: hands-on company building, early equity, and the chance to shape the next unicorn from day one. Yet the structure carries hidden risks.

As Christopher Aw explains, “While many families are pitched on the benefits of acting as a co-founder and owning more equity, the challenge comes later. If a studio holds 30% or more of a startup without being operationally active, Series A investors often view that equity as dead weight. It can block future fundraising.”

This cap-table issue is just one example of how families often underestimate the downstream implications of venture studios. The temptation to overconcentrate in these illiquid bets, without proper liquidity planning, frequently leaves families vulnerable to forced exits when markets tighten.

Deeptech: Desire outpaces diligence

Deeptech — from AI to biotech and robotics — captures imaginations worldwide. But genuine understanding is rare. Families with scientific or engineering backgrounds can sometimes leverage networks for proper diligence. Most, however, judge deeptech ventures by conventional business criteria: founders, market size, and scalability.

Chris cautions that this is risky: “Deeptech is by definition at the frontier. Even financial professionals often struggle to assess it. Families say they’re interested, but very few can properly evaluate these deals.”

A noticeable trend in the Middle East and Asia is families chasing pre-IPO deeptech allocations, not for love of technology, but for the potential “IPO pop.” As Chris observes, “In many cases, the focus isn’t on taking tech risk but on capturing a quick exit at listing.”

Common mistakes to avoid

Family offices repeatedly fall into the same traps when entering venture studios or deeptech:

• Confusing illiquidity with risk tolerance – long-term horizons don’t automatically mean capacity for illiquid bets.
• Overconcentration – piling into tech, real estate, or private equity without balancing across sectors.
• Neglecting liquidity planning – missing cash reserves leads to forced sales or missed opportunities.
• Overestimating diversification – alternatives often move with public markets, weakening their stabilising effect.
• As Chris notes, “After a liquidity event, families often invest more than their tolerance allows. Wealth can vanish fast through poorly executed direct deals.”

Building better models

The best-run family offices begin by mapping inflows and outflows — income, dividends, expenses, and commitments. This cash flow mapping underpins every sound investment framework. Beyond that, they increasingly seek advisors who bring unbiased expertise, strong networks, and the courage to counter internal biases.

From direct deals to strategic partnerships

Direct deals look attractive but demand active involvement. A handful of poorly vetted investments can erode wealth quickly. The trend is shifting toward diversified portfolios built with specialised venture funds and strategic partnerships.

Families are also exploring private credit, cross-border partnerships, and peer networks, recognising that the best opportunities often flow to those with the right relationships.

As Chris reminds us, “The families who win are those who ask hard questions, surround themselves with experts, and stay honest about what they don’t know.”

Conclusion

For family offices, venture studios and deeptech represent both promise and peril. Success lies not in chasing every new frontier, but in rigorous planning, humility, and alignment with trusted expertise. The future of family office investing will be defined less by hype and more by the discipline to build resilient, adaptable structures capable of withstanding both volatility and innovation cycles.

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This article is part of an ongoing series exploring how family offices in the MENA region are navigating venture capital, private equity, and alternative investments. Stay tuned for more insights in the coming weeks.