Family offices are taking to private equity like never before. Fortunes made from business empires large and small are being passed down generations and funnelled into the asset class at a time when it has scarcely been more alluring.

Persistently low interest rates mean that alternative strategies that promise high returns are more attractive than ever. Family offices and high-net-worth individuals account for 8% of the $4 trillion in assets under private equity's management, double the figure five years ago, according to data from Palico. This makes this breed of investors the second fastest-growing source of money for private equity firms, behind sovereign wealth funds.