Family Office Mandate Design
Mandate design translates family objectives into deployable rules (asset class, ticket, pacing, liquidity, constraints). Allocators look for mandates that produce repeat behavior, not broad “we do everything” narratives.
Family Office Mandate Design is the process of converting family objectives (preservation, growth, control, legacy) into a concrete allocation framework. Strong mandates define what the office will do, what it won’t do, and how decisions repeat over time — especially under stress.
From a GP perspective, mandate design is the difference between a real target and a perpetual “maybe.”
How allocators define mandate quality drivers
Allocators evaluate mandate design via:
- Asset class boundaries: what is core vs opportunistic
- Ticket sizing: minimum/maximum check sizes by strategy
- Pacing: annual deployment targets and re-up logic
- Liquidity constraints: lockup tolerance, distribution sensitivity
- Concentration limits: single manager, sector, and deal caps
- Structure preferences: commingled funds vs SMAs vs co-invests vs directs
- Geography/sector focus: “true” focus vs generic openness
- Governance link: who can approve exceptions to mandate
Allocator framing:
“Does this mandate create repeatable decisions — or only one-off anecdotes?”
Where mandate design matters most
- re-up behavior (whether an office actually renews relationships)
- portfolio construction stability across market cycles
- direct investing programs requiring consistent underwriting
- liquidity planning and risk containment during drawdowns
How mandate quality changes outcomes
Strong mandate design:
- enables faster qualification and cleaner yes/no decisions
- improves relationship durability with managers
- reduces regret and reactive portfolio shifts
Weak mandate design:
- creates high variance in approvals and reversals
- encourages opportunistic drift under stress
- makes portfolio construction incoherent across years
What slows decision-making
- unclear ticket size and pacing expectations
- mandates defined as “we do best ideas” with no constraints
- exceptions decided informally by principals
- liquidity constraints not articulated until late
Common misconceptions
- “Broad mandates are flexible.” → they often increase friction and indecision.
- “Mandates are static.” → good mandates evolve, but with documented rules.
- “Sector focus is always real.” → many are marketing narratives, not constraints.
Key questions during diligence
- What is your core mandate vs opportunistic allocation?
- What is your typical ticket size by structure (fund vs co-invest vs direct)?
- How do you pace commitments annually?
- What liquidity constraints matter most?
- Who can approve exceptions and how often do exceptions occur?
Key Takeaways
- Mandate design creates repeat behavior and faster decisions
- Ticket sizing and pacing are the most predictive constraints
- Governance around exceptions determines true discipline