McDonalds, Disney and Gucci are just three of the latest household names to mark their territory in the Metaverse, investing alongside Mark Zuckerberg in the $21BN industry expected to reach $800BN in just two years’ time.
While some call it web 3.0, others a virtual universe and some an unmissable investment opportunity, we unpick whether the world’s largest group of fluid investors will be investing in the Metaverse and what their involvement might look like.
Before we do embark on an out-of-this-world experience, thinking to reality and it is perhaps important to note that Family Office Leaders do not even like Zoom. As soon as guidance changed to allow professionals to head back to the office they opened their doors and have tried their best not to close them ever since. Control, autonomy and collegialism are key and as a result, visualising first generation Family Office Leaders hosting a team meeting on the Metaverse in the same way that Gymshark did earlier in the year is almost impossible.
That said, with virtual roles playing as important a role in our lives as our physical realities during the pandemic, it will not be long before many of us spend a large part of our time interacting in the Metaverse for both work and socialising purposes. We will be spending money while we are there which naturally brings the world’s largest group of fluid investors back into the conversation. Where there is an opportunity, there is a Family Office.
Microsoft cited the metaverse as the reason behind their $68.7BN acquisition of Activision Blizzard and with many suggesting it will be a $10 trillion to $30 trillion opportunity in the next decade, Family Offices are listening but they will be slow to act.
Family Offices like precedent. In the last 12 months, they have increased their private equity investments by 63% and made more direct investments than ever before. They did so not because of a sudden urge to try something a little different but because they had experienced years of proven returns.
On the other hand, more than half of all Family Offices say their risk tolerance has increased post-pandemic and the metaverse could be both a risk worth taking and a sequel to their interest in esports which became an asset class of focus in 2021. After all, video games are currently home to metaverse technology and is arguably the proof of concept investors need to take a leap into another universe.
Family Offices have been slowly focusing on esports as an asset class led by the likes of Bruce Karsh of Carolwood Capital Management, David Rubenstein of Declaration Partners, Jonathan Soros of JS Capital Management and Meg Whitman, the previous CEO of Hewlett Packard and eBay whose Family Office alongside those aforementioned, raised over $150M for esports in the last year.
$28.8M was committed in February 2021 and that number is growing, as has interest from the Family Office community and I don’t think it will be too long before the metaverse becomes an attractive part of this digital proposition for Family Offices. But, like everything, it is far too early to tell if Family Offices will take an interest in the Metaverse. Only time will tell.
Do you think Family Offices will invest in the Metaverse?