Average allocations in private equity continued to rise, from 16% average allocation in 2019 to 21% in 2021. Of those family offices, every year an increasing number of them are making direct investments. The Rise in Family Office Private Equity and Direct Investing, Fixed Income Falls BehindĪccording to a Morgan Stanley analysis, private equity, venture capital, private credit, private real estate and infrastructure investments have historically overperformed public markets.įamily offices on average allocate approximately 45% of their portfolios to alternative asset classes.Īnd according to a UBS report, over 80% of family offices invest in private equity. Learn more about how family offices can make use of AI. AI Takes Center Stageįamily offices haven’t always been known for being at the forefront of technology adoption, but that notion is changing.Ī report by UBS and Campden Wealth Research revealed that 62% of family offices are currently using AI or are planning to do so in the near future.ĪI can help in areas like making investment decisions, improving risk management, enhancing the client experience, among other workflows. Other areas most likely to see a rise in allocations are artificial intelligence, with 40% of those invested there planning to increase their allocations, green tech (35%) and biotech (34%).įamily offices have found the private markets to be a good hedge against inflation, as they have increased their exposure to private debt, private equity, and real estate. Private investments will be discussed in more detail below. Learn more Healthcare, AI, Green Tech, Private Marketsģ out of 4 family offices surveyed by Campden Wealth invested in healthcare in 2022, and 39% plan on increasing their investment in 2023. Investment Strategies to Deal With Inflation They are nimble investors with ample cash reserves, diverse portfolios and a long-term outlook, thus they’re able to ride economic waves while also capitalizing on opportunistic deals.” 2. This shows that family offices are well-poised to tackle turbulent economic conditions. With that said, their investment performance has been strong in recent years, despite the pandemic.
Rebecca Gooch, Senior Director of Research at Campden Wealth, summed up their views: “Family offices’ view of the economic climate has soured over the year amid sharp rises in inflation and interest rates. Indeed, inflation is a notable concern for family offices, according to a Citi Private Bank survey.Īnd 81% of those surveyed by Campden Wealth said investment risk is the number one threat to family offices.ĭr. According to a report from Campden Wealth, more than 3/4 of North American families grew their wealth in 2022, and more than half of family offices grew their assets under management.Īdditionally, North American family office investments outperformed global peers with 15% average portfolio returns, compared to 10% in Asia-Pacific, and 13% in Europe.ĭespite doing relatively well, the report found family offices have an increasingly bearish outlook on the economy for 2023, as high inflation persists.
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