Family offices are playing an increasingly active role in private markets, yet many still struggle with strategy, manager selection, investment discipline, and portfolio construction. In this interview, Ivan Nikkhoo, Managing Partner at N3 Capital and Navigate Ventures, shares his perspective on how family offices should approach private assets, why direct investing often leads to poor outcomes, and where opportunities lie in today’s market.
What is the strategy behind N3 Capital and Navigate Ventures?
At N3 Capital, which is our family office arm, we invest in a diversified way across various private capital strategies through other managers and families—private equity, real estate, private debt, secondaries, and funds of funds. Our philosophy is that private assets require a high level of specialization, access to the right deal flow, and a clear competitive advantage, which is why we prefer to back expert managers in each area rather than invest directly ourselves.
At Navigate Ventures, our operating business, we focus narrowly on direct venture capital investments in early growth enterprise SaaS companies outside Silicon Valley. We’ve raised three funds to date, each under $100 million, with a short holding period of three to four years. Our goal is an accelerated path to DPI with a favorable risk/reward profile.
So, your approach is to specialize while also educating other families on private capital?
Yes. In fact, I spend a lot of time educating family offices at conferences around the world. Many family offices made their wealth in operating businesses, but that doesn’t necessarily mean they have a deep understanding of how to invest in private markets, what questions to ask, and how to assess investments.
Direct investments from family offices often underperform, because the best companies raise capital from institutional investors first. If a startup is approaching a family office for funding, it usually means the institutional investors have already said no. That’s why I recommend families work with specialist managers and negotiate no fee/no carry co-investment rights—so they can learn by doing, but with expert guidance. This allows for a risk mitigated approach to direct investing.
How should family offices think about private assets?
They need to start with asset allocation across three assts classes: how much goes into real assets, public assets, and private assets. Within private assets, they should decide how to allocate across the six main strategies—private equity, venture capital, private debt, secondaries, funds of funds, and real estate.
Then comes the crucial question of where within those strategies to play—early-stage vs. growth, different geographies, different sectors—and finally, the most important step: selecting the right managers.
Two factors drive returns in private capital: manager selection and vintage year. The underlying strategy is secondary to these two factors. That’s why picking the right GPs, and staggering commitments across years, is critical.
What mistakes do family offices often make?
First, they often lack professionals with real expertise in private assets, relying instead on people they know and trust. Second, they don’t have proper systems to track capital calls, distributions, and portfolio performance in real time. Without visibility, they can’t manage liquidity or evaluate outcomes effectively. Often, they do not know the right questions to ask to optimize their risk/return profiles.
How do you see the current dislocations in the market affecting family offices?
There are two major trends:
Large institutions—pension funds and insurers—are increasing their allocations to private capital. This makes it harder for family offices to access the biggest managers, who prefer re-ups from large LPs.
The best returns historically have come from specialized emerging managers on funds two, three, or four. But identifying them requires effort, and many family offices shy away because they feel it’s too risky.
The opportunity for proactive families is to back smaller, highly specialized funds under $1 billion. Those are the managers most likely to deliver alpha. The issue is they are hard to find and even harder to diligence.
Some argue the system is broken—that it favors large asset aggregators. Do you agree?
Not at all. The system isn’t broken—it’s just hard. Asset aggregators exist because they can raise billions and earn massive fees. That doesn’t mean smaller, specialized funds can’t thrive.
For emerging managers, the challenge is differentiation. Just like startups, if you can’t convince the right investors why they should back you, maybe you shouldn’t be in the business.
Finally, what differences do you see between U.S. and European family offices?
U.S. family offices tend to be more mature investors in private capital. In Europe, there’s still enormous opportunity—but also under-allocation. Interestingly, European family offices are very eager to invest in U.S. funds, while American families rarely allocate to European managers. That imbalance is unfortunate, because many European managers offer strong return profiles.
What advice would you give to European family offices looking to increase exposure to private assets?
Start by clearly defining your strategy and risk appetite. Identify managers with integrity, specialization, and alignment. Invest through them, negotiate co-investment rights, and use the opportunity to learn. And above all, be disciplined about manager selection and vintage year diversification.
