Australia’s M&A landscape is undergoing a quiet but significant transformation. Alongside the well-established cohort of listed acquirers, private equity sponsors and trade buyers, a new type of sophisticated capital deployer has emerged with increasing prominence: the family office.
Once seen primarily as vehicles for succession planning and passive wealth preservation, family offices have evolved into active, deal-ready investors with a growing appetite for direct transactions. Fuelled by a confluence of generational wealth transfer, maturing founder-led businesses reaching natural exit points, and a desire for greater control over investment outcomes, family offices are now a meaningful force in the Australian M&A market, with family office investors as a proportion of active Australia-based private capital investors rising from around 20% as at December 2021 to just over 40% as at December 2025.
For M&A practitioners, this shift brings both opportunity and complexity. Family offices approach transactions differently from institutional investors. Their governance, decision-making, risk appetites and time horizons often look quite different from those of PE funds and strategic acquirers, and family dynamics often play a real part in acquisition and exit decisions. Advisers on either side of the table need to understand these differences and adjust their approach accordingly.
Family office wealth in Australia
The number of family offices has grown significantly over the past decade, driven by liquidity events from business sales, mining wealth, property development, and technology exits. Many of these offices are first or second generation, with founders remaining actively involved in investment decisions, a characteristic that materially influences how these offices approach M&A.
Family offices use a wide range of deal structures, from control acquisitions and minority stakes to co-investments with PE sponsors and platform-and-bolt-on strategies. At the lower end, family offices are active in the mid-market, where they both compete with and complement private equity. Larger deals are increasingly done through consortiums, either with other family offices or alongside a PE sponsor or strategic partner.
Drivers of transactional activity
A few key factors are driving family office deal activity:
- Maturing founder-led businesses: Many family offices were built on the back of a successful operating business. As founders age and their businesses mature, some sell and redeploy the proceeds through a family office. Others keep the business, but set up a family office to manage surplus capital and diversify through acquisitions.
- Succession planning and legacy: For many families, M&A is about much more than returns. Acquisitions are often part of a succession plan - building a portfolio of businesses that can sustain wealth across generations, give family members leadership roles, and reflect the family’s values, with that mix of financial and personal objectives being a key distinguishing feature of family office deals.
- Direct deal appetite: Family offices increasingly prefer to invest directly rather than through funds. Principals want to put money into businesses they understand and can influence, and often help run. Direct deals also give them control over value creation and exit timing, and avoid layers of fund fees.
Distinguishing features
Distinguishing characteristics of family office M&A: [Note to digital: put below into table or chart format]
- Longer hold periods: family offices typically invest with a 10-year-plus or permanent capital horizon, in contrast to the 3–7 year fund cycle of private equity.
- Flexibility on structure: family offices are generally more accommodating on deal structure, willing to consider earn-outs, vendor rollovers, staged acquisitions, and other bespoke arrangements.
- Fewer intermediaries: deals are often sourced and negotiated directly between principals, with less involvement of investment banks and other financial advisors.
- Relationship-driven approach: personal relationships and trust often play a more significant role than in institutional transactions, with deal origination often occurring through networks rather than more formal processes.
Structuring considerations
Family offices invest through a variety of structures, each carrying distinct implications for tax, asset protection, estate planning and governance:
- Discretionary trusts: often the preferred structure for their flexibility in the distribution of income and capital gains among beneficiaries, which allows for entitlements to the benefit of the investments to vary over time (for example, as the custodians of the office change between generations or the needs of particular family members grow). However, discretionary trust structures have recently come back into the spotlight following the 2026-27 Federal Budget measures (see below).
- Corporate trustees and holding companies: commonly appointed as trustee of a family trust to provide limited liability protection and a clearer governance framework. Control of the trustee company, and arrangements for its succession, are often central to passing the office between generations. Holding companies are typically used either independently or alongside trusts for the purpose of retaining profits at the corporate tax rate for reinvestment.
- Bespoke investment vehicles: special purpose vehicles (SPVs) established for individual transactions, sometimes structured as unit trusts or limited partnerships to accommodate co-investors.
Tax analysis is a critical area of focus in family office M&A, given the interplay between personal, trust and corporate taxation:
- The 2026-27 Federal Budget measures: including replacement of the CGT discount with indexation from 1 July 2027 and the new 30% minimum tax on discretionary trust income introduced into Parliament on 14 October, may add complexity to the management of family office structures and investments moving forward, albeit we would caution against acting in haste.
- Trust distributions: the timing and quantum of trust distributions, including appropriate streaming of historical discount capital gains and franking credits, to beneficiaries who are within the ‘family group’ for the purpose of the family trust election.
- Division 7A: where a family office operates through a corporate trustee or private company, loans or payments between the company and associated entities must comply with the requirements of Division 7A of the Income Tax Assessment Act 1936 (Cth) to avoid deemed dividend treatment.
- Stamp duty: family offices that acquire interests in private companies or unit trusts holding land need to consider the landholder duty regimes in each State and Territory, which can impose transfer duty on acquisitions of significant interests as if the underlying land had been acquired directly. Family offices may also need to consider stamp duty in the context of rollover relief if they choose to restructure having regard to the recent Budget measures.
Advisers need to work closely with the family’s tax advisers to ensure that the relevant structure is fit for purpose, having regard to the near-term and longer-term commercial objectives, family dynamics (including succession planning) and asset protection at all stages of an investment lifecycle.
Outlook
Australia is on the cusp of one of the largest intergenerational wealth transfers in its history, with an estimated A$3.5 trillion expected to change hands over the next two decades. This transfer, combined with increasingly professional investment teams, is likely to drive further family office formation and channel additional capital into direct investment and M&A activity.
For advisers, this is a growing market but also a different kind of client. Technical legal and finance skills are a given, but what sets advisers apart is an understanding of what motivates family offices and how they make decisions.
Understanding the structuring preferences, governance dynamics, tax considerations and regulatory exposures of family office clients is key, and advisers need to navigate the intersection of technical rigour and commercial pragmatism in order to best serve this growing and increasingly sophisticated client base.
