The SPV Boom: What Every Family Office Should Know

SPVs have been likened to SPACs: a money-spinner for the issuers, a nminefield for investors. 

But as always, the reality is more nuanced than the headlines. So today it’s a look at Special Purpose Vehicles. The advantages, the disadvantages and how family offices should use them. 

An SPV is a simple idea: a group of investors pool their money into one entity, that entity buys a single asset, and each investor owns a slice of the vehicle rather than the asset itself. The SPV manager handles the investment and gets paid for doing so

In recent years, they've grown in prominence. As tech titans stay private far longer, more value gets created before the IPO, and investors want a way in. Step forward the SPV. 

​The business around SPVs is booming. Precedence Research estimates the global SPV services market at $13.9bn, rising to $26.7bn by 2035. This is not capital allocated through SPVs but the business of SPVs themselves: administration, structuring, legal, tax and trustee services across financial institutions, real estate, infrastructure and PE/VC.

You might think family offices would never need an SPV. They've got the capital. Why not go direct?

It's not so simple.

Firstly, capital isn't always enough. A family office may be well-funded, but many private behemoths are hoovering up SERIOUS money, and big-tech is often in another league. Normal check sizes won't cut it, and most families aren't writing tickets large enough to matter.

Second, a network doesn't mean it's the right network. We've seen dozens of family offices in WhatsApp and Slack groups putting out shout-outs for access to the hottest tech companies. One broker put it bluntly: "These family offices just have no idea." Having money doesn't always open the right doors.

Then there's the company's side. Powerful private companies want to keep a clean, simple cap table. They don't have time to diligence families for a mere $10M check, and they don't want to field questions from hundreds of shareholders who don't understand the business.

So everyone wants a piece of Anthropic, and the only way in is often an SPV.

SPVs can solve genuine problems, notably that some of the most valuable companies on earth won't let you near their cap table. 

SPVs lower the minimums. Pool capital with others and the ticket size drops. 

For the companies, SPVs can mean cleaner cap tables. The company adds one SPV instead of two hundred shareholders. That keeps them under reporting thresholds, and simplifies investor relations.

The reality is that family offices aren’t always suited to founders. A fund manager we spoke to put it bluntly: 

“The perception of these families is that they’re the shit, like I made all this money, everybody should make room for me. This is just not the way that these companies think about it. You have to think about it from a founder's perspective.”

Capital is often not enough… “everyone has money”. Unless investors can bring additional benefits beyond capital, he argued, founders can shop around. What they increasingly want is “strategic value” from investors. Clearly they want access to capital, but they also want access to connections, talent, and increasingly compute power. 

SPVs can also solve the problem of too many investors on the cap table, as well as check sizes being too small

“A $50 billion company taking a $1 million to $5 million check, it's just not worth your time and most of these families are not writing larger checks than $10 million into single names.”

As an investor, SPVs give you options. You pick the single asset you want. No blind-pool fund. No paying a manager to guess on your behalf.

And SPVs do useful structural work beyond investing. Risk isolation. Financing. Asset protection. Drop a project or an asset into its own entity and you ring-fence the liability.

Used well, the SPV can be useful tool for family offices.

Here’s the catch: with SPVs, people frequently don't know exactly what they're buying. It looks simple on paper. In practice it's often far more complicated. And there have been some horror stories.

Fortune ran a piece in June calling the secondary market a $100 billion shadow market heading for a reckoning. Forbes went further, describing the trade in pre-IPO SpaceX and OpenAI shares as murky. 

We covered the world of secondaries recently with Diane Dupré, formerly of UBS, now at Clifton Partners. Her warnings to readers were straightforward:

“Steer clear of SPVs created by unregulated brokers with well-established presence. Always scrutinize the fee structure, and avoid deals with too many layers - or if layers do exist, make sure you fully understand the structure at each level. And always demand proof of shares.”

SPVs are getting a bad reputation, and it's easy to see why: they come with fee baggage.

Every link in the chain takes a cut. Upfront access fees have crept into the market. Fees are creative and expanding. Typically, there is some form of management fee and carry. 

Stack an SPV on an SPV, each charging a management fee and carry, and the math turns ugly fast.

Imagine a 10x exit on a $1M investment, but with three layers of SPVs with a standard 2/20 structure (2% management fee, 20% carry):​

Half the upside. Gone. To people you may never have met.

Fees are only part of the problem. You might buy into an SPV that owns another SPV that owns another vehicle that finally owns the shares. At every step removed from the asset, there's risk. 

SpaceX is a good example. Its IPO priced at $135 and the intra-day price surged above $200 within days. An investor holding directly could potentially have sold into that early rally, but many pre-IPO investors were several layers down an SPV chain. 

Moving shares, obtaining approvals and distributing them through those layers can take time. By July 15, barely a month after the IPO, SpaceX had fallen below its $135 IPO price. The underlying asset may be liquid, but that does not mean your investment is liquid when it matters.

Being several steps removed from the company means you also take on structural and counterparty risk at every layer. You do not own the shares; you own an interest in an entity that may own an interest in another entity that ultimately owns the shares. 

And if something goes wrong at the underlying company, your legal rights may extend only to the SPV immediately above you, not to the company whose economics you thought you were buying.

So the real question stops being "do I want to own Anthropic?" It becomes "what do I actually, legally own, and how many people sit between me and the shares?"

Anthropic, Anduril and OpenAI all restrict secondary transfers. An SPV can claim economic exposure to a company that doesn't recognize the ultimate owners at all. You're then relying on a chain of strangers to eventually pass the proceeds through.

And there's fraud. 

The ugly end: Fortune warns of allocations that don't exist and promoters selling shares they never had. The Linqto collapse highlighted the dangers. Investors believed they held direct stakes when they held SPV interests carrying undisclosed markups.

The company went into bankruptcy. The allegations are not proof of wrongdoing. But the mess is very real.

The cleanest secondary allocations get offered to a small circle of trusted buyers who move fast and keep quiet. Dupré made this point clear. 

“The founders and GPs who control the best deal flow have long memories. They know which buyers kept transactions confidential and which ones didn't. They know who ran quiet processes and who shopped the deal across twenty advisors. That reputation determines who gets called first on the next opportunity.”

So a lot of families never see the direct deal. They see what's left. And what's left is often the SPV stacked on an SPV, sold by whoever was willing to sell to them.

It all points in the same direction: Don't just diligence the company, diligence the whole chain between your money and the company.

A short SPV checklist:

None of this is exotic. It's the discipline that separates the families who compound from the families who fund someone else's fees.

An SPV is a chain of legal promises connecting you to an asset. That chain deserves every bit as much scrutiny as the asset at the end of it.

And demand proof of shares. Every time.