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Investing

Family offices increasingly drawn to venture debt

Marcus Baram
Author Marcus Baram

Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.

Marcus Baram
Bob.Allen
Apr 11, 2025
1 month ago
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With markets in chaos and tariff threats upending the global economy, family offices are increasingly drawn to alternative investments — including the small credit niche of venture debt. 

Venture debt has become more popular due to its flexibility. This type of lending to high-growth companies might discourage equity investment because it dilutes ownership. But with a steep drop in venture capital deals, the niche offers a way for investors to get access to those growth companies. 

Venture debt investment grew to $53.3 billion last year, up 94.5% from $27.4 billion in 2023, driven by fewer — but much larger — deals, according to Pitchbook.

In early April, the Swiss family office Cape Capital took part in a €25 million venture debt financing arrangement for Fairmat, a French company that specializes in recycling carbon-fiber composite materials. And family offices interested in accessing India’s consumer sector are using venture debt, said Sahil Aggarwal, director of the venture debt fund Trifecta Capital.

“Investors have been attracted to the space as they seek differentiated strategies with demonstrated performance that is less correlated to public markets and other private market strategies, said Andrew Kahn, co-founder and CEO of Partners for Growth, a global private credit firm. “Family office investors tend to be open to more esoteric strategies and seek to capitalize on market niches.” 

Kahn, who has been structuring custom financing for technology companies for several decades, added that “venture debt and tech lending strategies can be a diversifying element to portfolios, give the secured credit nature of the funds and specialist focus on high growth companies.”

As a niche sector with limited competition, venture debt can boost risk-adjusted returns, said Marten Vading, managing director of BlackRock Growth Debt. “Compared to equity, growth and venture debt come with a host of features that offer more predictability of return,” Vading said. “They have a predetermined repayment schedule, clear security, amortization and priority in the capital structure.”

According to a recent BlackRock report: “There’s an abundance of high-quality companies actively in search of debt financing. They’re turning to a relatively small pool of qualified lenders who understand the intricacies of structuring these loans.”

Read more:

> Why venture debt deserves a place in family office portfolios

Marcus Baram
Author Marcus Baram

Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.

Marcus Baram
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