Family offices across Europe are entering a new era. As generational wealth transfer accelerates, technology reshapes investment processes, and private markets become an increasingly strategic allocation, families are adopting more institutional approaches while maintaining their long-term perspective.

In this interview, Georg Bundy, Head of Family Capital Europe at Hg, shares his perspective on the evolution of family offices, the growing role of AI, why software continues to offer compelling long-term opportunities, and how trusted partnerships are becoming just as important as investment performance. From governance and diversification to generational stewardship, Georg explores the structural shifts that are redefining family capital for the decade ahead.

You work closely with family offices across Europe. What are the biggest changes you've seen in how families approach investing today compared to five or ten years ago?

Three shifts stand out, and they build on one another.

First, professionalisation. A decade or two ago, family offices were often extensions of the principal's investment instincts — privately managed UHNWI (ultra-high-net-worth individual) portfolios. Today, even smaller FOs run institutional-grade IC processes, dedicated asset allocation frameworks and in-house origination; they behave more like small endowments than wealth managers. They are also clearer about what they should not do: direct investing, for instance, was once a space many smaller FOs wanted to compete in, but many now recognise that, without far larger teams, there is little to gain from going head-to-head with specialist small-cap PE or VC funds. So they concentrate direct activity only where they have a genuine edge and move towards fund-style exposures elsewhere. And “lean” FO structures — typically beginning at around €50m of net worth — are increasingly viable, enabled by AI and technology that let more families run a professional setup at a fraction of the historic cost.

Second, a new generation is at the table, and it brings a different mindset. The next generation is genuinely engaged: they treat private markets as a structural allocation rather than an exotic add-on, think internationally by default, and frame governance, allocation and wealth transfer across generations rather than a single lifetime. They want real diversification — not “60/40 plus a bit of PE” or “real estate plus some exciting VC”, but a genuine rethink of what diversification means inside a strategic asset allocation — and they expect a level of sophistication and transparency that previous generations did not always demand.

Third, and as a result, what families want from a GP has changed. The conversation is of course about access to a fund but now much more about strategic, long-term partnership: value beyond capital, i.e., peer exchange, network, and a counterpart who thinks in the same multi-decade terms they do.

Overall, more professional family offices, run by more curious and more demanding teams, raise the bar for us as a GP — in a very productive way.

Hg has become one of the leading investors in software and technology. What makes this sector continue to stand out for long-term investors?

Three reasons, and I'd argue they compound.

We believe that not all software is created equal. The current market correction has been indiscriminate, but we think the distinction between vertical, mission-critical software and horizontal productivity tools matters enormously. The kind of software we focus on — for example, complex payroll, tax compliance, fund administration,  or hospital billing — sits at the “sticky end” of the value chain. Customers can't switch it off or exchange it overnight, even in a downturn. That's a fundamentally different risk profile than a generic dashboard product.

We believe that the compounding characteristics are unusual. Recurring revenues, high switching costs, deep customer relationships. Over long holding periods, these businesses don't just grow — they re-rate. We've seen software companies move from low single-digit organic growth to double digits ie. 20%+ over a decade, while EBITDA margins expand. That's the kind of asset profile a generational investor should care about.

In our view, software is shifting from a system of record to a system of action.  Today's global software market — the total addressable market, or TAM — is roughly $1 trillion. But as AI-enabled software starts doing work rather than just supporting it, it begins competing for share of the $60+ trillion the world spends on addressable cognitive human labour annually. If that thesis plays out — and we think it will, for the right kind of software — the addressable market expands meaningfully, and, in our view, the best-in-class AI-focused incumbents are well-positioned to capture their fair share. We believe, Europe is structurally well-placed in this context: building category leaders across multiple jurisdictions, languages, and regulatory regimes is itself a moat that's hard to replicate from outside.

Many family offices are increasing allocations to private markets. What do you think is driving that shift?

Four structural drivers, in my view.

Generational transfer is bringing a different decision-maker to the table. $80+ trillion will pass between generations over the next 20–25 years, and the moment of transition is when families revisit how their capital is allocated. The combination of more capital changing hands and, as mentioned before, a more professional, more privately-minded generation deciding where it goes is a powerful structural tailwind.

Public markets are rather concentrated today. A handful of US tech names now dominate global indices to a degree we haven't seen in modern history. A family with a “well-diversified” public equity portfolio is, in reality, often taking a concentrated bet. Private markets are one of the few honest ways to diversify away from that.

80%+ of the world's sizable businesses are private. A family with a multi-generational horizon that is only invested in listed markets is, by definition, missing most of the global economy. Once you frame it that way, the question isn't “why private markets?” — it's “how could we not?”

The product set has finally caught up with what some family offices actually need. Traditional closed-end funds were built for institutional balance sheets — ten-year lockups, capital calls, J-curves. They were not designed for families. Today's evergreen structures offer something genuinely different: day-one diversified exposure without the need to subscribe to individual funds over and over again, full compounding from day 1 with more emphasis on actual MOIC vs. IRR, quarterly subscription and liquidity windows subject to specific terms (e.g., subscription and redemption caps), operational ease without the need to manage drawdowns, distributions and excess cash. It's the same underlying asset class — just a structural access point that finally fits how many families think about capital. That alone has unlocked a lot of demand that simply couldn't engage with the old format. These structures sit alongside and complement traditional closed-end funds, so families now have more options to choose from. 

Through Hg Wealth, you work directly with sophisticated family office investors. What are they asking about most often right now?

Three questions come up consistently.

“How AI-resilient is the underlying portfolio?” This is the dominant question of 2026, and rightly so. Families want to understand which businesses are genuinely defended by their data, their workflows, and their customer relationships — and which can capture AI-related value, either on the top or bottom line — versus those that are simply well-priced on legacy assumptions. They want to see how the GP is actually working with portfolio companies on AI, not just talking about it. That's a level of scrutiny we welcome, because it's the right question.

“Will we be treated the same as your largest institutional clients?” This matters more than people sometimes realise. Family offices and foundations want to know they will get the same underlying fund, the same service level, the same level of access to senior leadership and diligence materials, and the same kind of network quality — events, knowledge sharing, peer introductions — that the largest pension funds receive. For us, the answer is simply yes to all of these.

“How do you behave when markets get volatile?” In our experience, trust is built in difficult quarters, not easy ones. Families want to see consistency — in valuation discipline, in liquidity management, in communication. After the recent software sell-off, the conversations we've had with FOs have actually deepened, because they want to understand how a specialist thinks when many generalists are panicking. Long-term partnerships are built precisely in moments like this.

Family offices often think very differently from institutional investors. In your experience, what makes them unique as investment partners?

Honestly, they fit Hg's DNA in many ways.

A meaningful share of the founders and CEOs of companies we've owned over 25 years are themselves now family office principals or UHNWIs — they sold their business to us, partnered with us, and are now investors with us. That continuity creates a remarkable network: people who understand operating businesses from the inside, who've lived through the same kind of value-creation journey we underwrite, and who genuinely engage with us as peers rather than as a counterparty.

Family offices are also, frankly, one of the most dynamic and fastest-growing parts of the global capital base. The portfolios we see across our FO network are intellectually rich — operating businesses, direct deals, co-investments, real assets across geographies. That's a community we learn from, not just sell to.

And there's a values alignment that runs deeper than the term sheet. Curiosity, entrepreneurship, willingness to back innovation patiently, comfort with long horizons, a preference for substance over noise — these are the things Hg's culture is built around, and they are the things most serious family offices recognise as their own. When you find that alignment, the relationship becomes anything but superficial.

We're living through a period of rapid technological change, especially with AI. How do you think family offices should think about opportunity versus hype?

The market is currently treating all software as if it were the same. It isn't — and for us that, more than anything else, is the opportunity.

In our view, AI is not killing software. It is separating the winners from the rest. We believe that the businesses most at risk are horizontal tools that essentially organise information visually. If AI can talk directly to the underlying data, the visual layer becomes less valuable. The market is right to question those.

But specialist vertical software that manages mission-critical, regulated workflows looks fundamentally different. These systems sit on proprietary data built up over years, embed deep domain knowledge, handle deterministic outcomes where a wrong answer creates legal liability, and reach customers through distribution networks that can't be replicated overnight. Those are exactly the characteristics that, we believe, make a business more valuable in an AI-enabled world, not less. Our companies are evolving from systems that store information into systems that do the work — and in our view, that shift expands the addressable market dramatically. It also helps that, for the first time in modern history, software development itself is becoming cheaper rather than more expensive, which fundamentally changes what specialist incumbents can deliver to their customers.

The historical parallel is instructive. The dot-com era convinced people the internet would eliminate offices within five years. It took twenty years and a pandemic — and yet we are all back in the office. It helps to frame AI as the next 15-year platform shift, comparable to mainframe-to-PC or web-to-mobile: we think its real impact will probably take longer than the hype cycle suggests, and ultimately be larger than the sceptics expect. Both things can be true at once.

You've worked across private equity, consulting, and now closely with family capital. What lessons about long-term decision-making have stayed with you throughout your career?

“Time in the market” beats “timing the market” — but only if your assets compound. Trying to call entry multiples is mostly a distraction. What actually matters is whether the underlying business can double or triple in size over your holding period. If it can, your entry multiple is often a rounding error. If it can't, often no purchase price was cheap enough. The discipline isn't picking the bottom — it's choosing assets that compound.

Specialisation compounds, too. The most valuable insights come from working in the same area deeply over many years, not from broad pattern-matching across sectors. There's a phrase we use internally — “an inch wide, a mile deep” — that captures our philosophy well. You see the second-order effects that a generalist would miss. You spot the trend earlier because you've seen the precursor before. Both at Hg and in my own family office work, the moments where I've been most useful are the ones where deep familiarity created a kind of pattern recognition that no amount of fresh analysis could replicate. It also allows you to be a step ahead — for example, with our 100+ strong value creation and AI team, and what we call “product-led investing”, which sits beyond the traditional PE playbook and, we believe, fundamentally changes our ability to create sustainable long-term returns for clients.

Stay paranoid, especially when things are going well. Good investors and managers are paranoid in good times and calm in bad ones — the opposite of how most people behave. The job is to permanently calibrate, to listen for what you don't yet understand, and to be honest with yourself about where the next risk and opportunity is coming from. Markets reward humility far more often than they reward certainty.

Finally, when you think about the future of family offices over the next decade, what excites you most?

Three things, and they connect.

Proliferation of private markets is becoming a generational shift. Families who previously could only access private markets through fragmented, expensive structures will increasingly get access on equivalent terms to the largest institutions. That's not a marketing point — it's a genuine reshaping of how multi-generational capital can be allocated. It changes what's possible for families over a 30-year horizon.

The next generation is becoming a more prominent actor. They are more open to private markets, more comfortable with international structures, more digitally native, and frankly more demanding about transparency and partnership quality. The professionalisation of family offices I mentioned earlier is going to accelerate, and the relationships between FOs and serious GPs will look more like genuine long-term partnerships than transactional fund subscriptions.

Partnership is going to mean something real. What I find most exciting is the shift from “investor in a fund” to “member of a network”. Families want events that gather their peers, knowledge-sharing on themes that actually matter — AI adoption, governance, succession, geopolitics — and synergies with portfolio companies they might otherwise never meet. The GPs who treat FOs as a community of intelligent, curious, long-term partners — rather than as a distribution channel — are best positioned here. That's the model we believe in, and it's the model the best families are increasingly asking for. And frankly, it's just genuinely exciting to be part of those conversations, to help build that network, and to learn a great deal along the way.