Gulf Family Offices Want Direct Deals Alongside Their Funds, and It Is Reshaping How Capital Is Raised, Says Artane Partners
Blind-pool funds remain central to Gulf allocation, but a growing appetite for direct and co-investment is changing what operators and managers need to bring to the table, according to Dublin-based advisory firm Artane Partners.
For most of the past two decades, the road to Gulf capital ran through the fund. A manager raised a vehicle, a family office or an institution committed to it, and the money was drawn down and deployed over years on the manager’s timetable and terms. That route remains central, and for many strategies it is still the right one. But according to Artane Partners, a capital advisory firm and placement agent that works between Western operators, fund managers and Gulf-based allocators, it is no longer the only route, and increasingly not the first one the region’s family offices reach for. Alongside their fund commitments, a growing share now want the option to invest directly.
The change rarely announces itself. There is no fanfare when a family office in Riyadh decides it would like to co-invest in a single asset alongside a sponsor as well as hold its position in that sponsor’s fund. But across its mandates, Artane Partners says the pattern has become one of the defining features of how private capital now moves through the Gulf. Where an allocator a few years ago was content to back a fund and wait for the manager to deploy, many now also want to see specific companies and assets, take direct positions where they have conviction, and decide deal by deal. Co-investment, long offered as an occasional benefit to favored investors, is increasingly something allocators ask for at the outset.
Several forces are pushing in the same direction at once. The first is generational. Many Gulf family offices are passing from the founders who built the underlying businesses to a younger cohort that is more institutional in how it invests and more confident making its own calls. That generation has built in-house investment teams, hired from banks and funds, and wants to put that capability to work directly as well as through external managers. The second is economic. After a long stretch of higher interest rates, allocators have become more attentive to fees and lock-ups, and more interested in structures that let them deploy selectively. The third is alignment. Families that made their money operating real businesses tend to value what they can see, govern and influence, and a direct stake alongside a trusted manager scratches that itch in a way a passive fund position alone does not.
Importantly, Artane Partners frames this as a broadening of how allocators invest, not a rejection of funds. “The fund is not going anywhere, and we spend a great deal of our time helping managers raise them,” said Clinton Apos, Founder of Artane Partners. “What has changed is that the same families who commit to a fund now also want a direct line to the deals. They want to understand the asset and the terms, and they want the option to put more behind the ones they believe in. The managers and operators who can offer both a fund and a direct route are the ones getting the warmest reception.”
In practice, the shift shows up in structure. Allocators are asking for co-investment rights alongside their fund commitments, for single-asset vehicles that sit next to a manager’s main vehicle, and for governance and information terms that give them a closer view of what they own. Club deals, in which a small group of families take a company or a property together, are increasingly common. So is the request to follow a credible manager or operator into a series of opportunities on a deal-by-deal basis, complementing rather than replacing the pooled commitment.
That has practical consequences for the firms trying to raise. Artane Partners says managers and operators who can offer only a fund, with no direct or co-investment route, increasingly find allocators holding back capital they would otherwise deploy – not because the appetite is absent, but because the format on offer is narrower than what the allocator now expects. Those who can present both a fund and a clean direct structure, with defined economics, clear governance and a realistic path to exit, are finding markedly more receptive conversations.
“This is good news for managers who read it correctly,” Apos said. “A family office that co-invests in your deals gets closer to your work, sees how you operate, and very often becomes a larger and more committed investor in your next fund. Direct and co-investment is not competing with the fund model in the Gulf. For the managers who embrace it, it deepens the relationship and the commitment over time.”
The broader appetite does raise the bar. A direct or co-investment position puts the allocator closer to the underlying risk than a diversified fund holding does, and that proximity rewards preparation. It calls for cleaner information, tighter terms, disciplined diligence, and operators and managers with a track record that holds up to direct scrutiny. The advantage runs to those who are ready for it. Firms that arrive with both a credible fund and a direct structure, and the diligence already done, are not just raising capital. They are meeting allocators on the terms allocators now prefer.
None of this comes without tension. Direct and co-investment concentrate risk in a way diversified funds are designed to avoid, which is one reason the pooled model endures and why the largest sovereign and institutional allocators continue to commit to funds at scale. Artane Partners does not expect direct investing to displace the fund so much as to sit alongside it, professionalizing as families build the teams and discipline it demands. The firm expects the direct and co-investment share of Gulf private capital activity to keep climbing through the rest of 2026 and into next year, and it expects the managers and operators who offer allocators both routes to be the ones who raise on the best terms.
About Artane Partners
Artane Partners is a Dublin-based capital advisory firm and placement agent that connects operators and fund managers with Gulf-based capital sources, including sovereign wealth funds, family offices and institutional allocators. The firm advises on equity, debt and strategic capital across the GCC, with coverage spanning Dubai, Abu Dhabi, Riyadh, Doha and Kuwait. More information is available at https://artanepartners.com.
Media Contact:
Media Relations, Artane Partners
https://artanepartners.com
