Conclusion: The Ultimate Aspirational Asset

If a family that no longer owns an operating business is going to have any chance of maintaining its wealth across the generations, the family's portfolio must have a healthy allocation to private equity, and that private equity must be invested in top-quartile funds.

Almost everything about PE is a challenge, from finding and gaining access to the best managers, to building an appropriate exposure while cash is both going out and coming in, to navigating the J-curve, to tolerating the illiquidity associated with long lockups. All this hassle is worth it only because PE is the ultimate aspirational asset; a way for families to invest alongside entrepreneurs who are soulmates of the family members who built the wealth in the first place.