Private equity and direct investment are core activities for many family offices, offering more control and potentially higher returns than passive portfolio investing. But they also come with legal and structuring complexity that needs to be right from the outset — get it wrong, and the cost shows up later, often at the worst possible time.
Why Family Offices Turn to Direct Investment
Unlike traditional fund investing, direct investment gives a family office a hands-on stake in a specific business or asset — more control, more visibility, and often a closer alignment with the family’s own expertise or industry background. It also means the family carries more of the legal and commercial risk directly, rather than through a diversified, professionally managed fund structure.
Key Legal Considerations
- Deal structuring — choosing the right entity and investment vehicle for each specific deal, balancing tax efficiency, liability protection, and flexibility
- Due diligence — thorough legal and commercial due diligence before capital is committed, since direct deals don’t come with a fund manager’s existing diligence process
- Shareholder and governance agreements — clearly defining rights, control, and exit mechanisms before money changes hands, not after a dispute arises
- Overseas investment rules — for larger or sensitive investments, New Zealand’s Overseas Investment Act may require consent, particularly for significant business assets or sensitive land
Overseas Investment Considerations for International Families
Family offices with international ties investing in New Zealand assets need to be aware of the Overseas Investment Act 2005, which can require consent from Land Information New Zealand for certain categories of investment, particularly significant business assets, fishing quota, and sensitive land. Structuring an investment without accounting for these requirements upfront can cause significant delays — or an inability to proceed at all.
Structuring for the Long Term, Not Just the Deal
A direct investment made through the wrong structure can create problems well beyond the initial transaction — complicating succession, exposing other family assets to risk, or creating tax inefficiencies that compound over years. This is why private equity and direct investment decisions shouldn’t be made in isolation from the family’s broader asset protection and succession strategy. Our guide on what asset protection is and asset protection planning for family offices cover how these pieces typically fit together.
How Agile Legal Can Help
We advise family offices on the legal structuring of private equity and direct investment activity, as part of our Family Office services, including deal structuring, due diligence coordination, and overseas investment compliance where relevant. If you’re also investing in real estate, our guide on family office real estate legal considerations covers that specific asset class in more depth.
Book a confidential consultation to discuss your family office’s investment structuring.
This article provides general information only and does not constitute legal, tax, or financial advice. Speak with a qualified advisor about your specific circumstances.