The blind-pool fund model served a defined purpose in an era when family offices lacked the internal capacity, market access, and legal infrastructure to deploy capital directly into private markets. That era is closing. Seventy per cent of family offices are now engaged in direct investing, up from a significantly lower base a decade ago, according to Citi's 2025 Global Family Office Report. Sixty-four per cent expect to make six or more direct investments in the coming year, a figure that represents a 10 per cent increase from the previous period, according to BNY's 2025 Investment Insights for Single Family Offices. The shift is not marginal. It is a structural reorientation of how private capital at the family office level engages with private markets, and it has direct implications for the infrastructure financing landscape in the Global South.

The motivations driving the migration toward direct investing are well documented. BNY's 2025 research recorded a 52 per cent year-on-year increase in family offices citing alignment of interests as a crucial consideration in their investment approach. Goldman Sachs's 2025 Family Office Investment Insights report, which surveyed 245 family offices in September 2025, found that 44 per cent of family office portfolios were allocated to alternative assets, with infrastructure investments specifically rising in response to global demand for digitisation, logistics, and energy infrastructure. Deloitte's 2024 Global Family Office survey found that direct private equity already accounts for 17 per cent of the average family office portfolio, compared to 10 per cent for private equity fund structures, confirming that direct has already overtaken fund-of-fund exposure as the preferred format for private markets engagement.

The club deal has become the dominant format for family office private market activity, representing 69 per cent of investment activity according to X1 Wealth's 2026 analysis drawing on J.P. Morgan data. A club deal is a co-investment structure in which multiple family offices or private investors participate directly in a single transaction alongside a lead sponsor, sharing deal economics without the fee layers and opacity of a commingled fund. The growth of club deal activity reflects precisely the dynamic the data describes: a preference for alignment, transparency, and direct participation over delegated management.

The blind-pool fund model's structural limitations are not a new discovery. The information asymmetry between a fund manager and its limited partners, the management fee and carried interest structure that compounds across vintage years, and the limited recourse available to limited partners when a fund manager's strategy drifts or performance deteriorates have been documented criticisms of the model for decades. What has changed in the current environment is the capacity of family offices to act on those criticisms. As Goldman Sachs's 2025 research identifies, direct investing offers family offices strategic involvement in portfolio company governance, direct access to management, increased control over investment selection, and the ability to leverage the entrepreneurial expertise and industry knowledge that many family offices possess but which remain underutilised in a passive fund relationship.

The fee arithmetic is also material. The traditional 2 per cent management fee and 20 per cent carried interest structure on a fund with a 10-year lock-up and a diversified portfolio of 30 to 50 companies means that a significant proportion of gross returns is absorbed before the limited partner receives any distribution. For a family office with the capacity and conviction to underwrite a direct infrastructure tranche, the elimination of that fee layer represents a meaningful improvement in net returns without any change in the underlying asset's performance.

Direct infrastructure investment at scale requires legal vehicles that can isolate the liability associated with each individual asset from the broader family wealth structure. The Variable Capital Company, as examined in an earlier briefing in this series, provides exactly that architecture. A family office deploying capital into multiple infrastructure tranches through a Mauritius VCC can hold each tranche in a legally separate sub-fund cell. A regulatory challenge affecting the energy infrastructure cell does not create cross-default exposure for the maritime concession cell or the real estate holding cell. The assets, liabilities, and revenue streams of each cell are legally ring-fenced from the others, and from the family's broader wealth structure outside the VCC.

This cellular architecture addresses the primary structural objection to direct infrastructure investment by family offices: the concentration risk of deploying a significant portion of family wealth into a single asset without the diversification that a pooled fund provides. Within a VCC, the family office achieves both directness and diversification. It holds direct, auditable positions in a defined set of infrastructure assets, each ring-fenced from the others, without the opacity, fee drag, or governance limitations of a commingled fund. The VCC can accommodate both the deal-by-deal direct investment model and the club deal co-investment model, making it sufficiently flexible for family offices at different stages of their direct investing journey.

Infrastructure is a category that is explicitly and increasingly on the family office agenda. Goldman Sachs's 2025 research found that infrastructure investments are rising across family office portfolios as global trends drive demand for digitisation, logistics, and healthcare facilities. One quarter of surveyed family offices expect to increase their allocations to industrials and energy, in line with global demand to power artificial intelligence infrastructure and the green transition. Forty-four per cent prefer direct investment in private real estate, a preference that extends naturally to the broader physical infrastructure category.

The Global South presents a specific set of infrastructure investment opportunities that are structurally well-matched to the family office direct investing model. Infrastructure projects in the Global South, whether port logistics facilities, industrial power systems, maritime services concessions, or real estate developments in high-growth corridors, are typically too small for the largest institutional infrastructure funds and too complex for passive fund exposure. They require the kind of active engagement, local knowledge, and long-horizon patience that family offices are increasingly positioning themselves to provide. The club deal model, in which a small number of family offices co-invest directly alongside a local operating partner or development sponsor, is well-suited to deal sizes and structures that characterise Global South infrastructure development.

For family offices based in Europe, the Middle East, or Asia considering direct infrastructure exposure in Africa or South Asia, the Mauritius IFC provides a combination of legal architecture, treaty access, and regulatory credibility that no other Indian Ocean jurisdiction currently matches. The VCC structure provides cellular liability isolation. The treaty network of over 40 DTAAs provides the fiscal framework for capital flows across the principal target markets. The FSC regulatory framework provides the compliance credibility that institutional co-investors and development finance institution counterparties require as a condition of partnership.

The practical consequence is that a family office establishing a Mauritius VCC as its Global South infrastructure vehicle can participate in club deals across multiple jurisdictions without establishing separate legal entities in each market. The VCC holds the direct positions, the sub-funds isolate the liabilities, and the treaty network manages the fiscal dimension. What previously required a complex network of local SPVs, correspondent banks, and jurisdiction-specific legal advisers can be substantially consolidated within a single regulated structure in a single jurisdiction.