Family Offices Boost Private Equity, Real Estate Investments Despite Uncertainties
Family offices have shown a significant shift in their investment strategies, with a notable increase in allocations to private equity and real estate. Despite external uncertainties, they maintain a bullish outlook for the coming year.
Both smaller and larger family offices have boosted their investments in private equity, with increases of 25 per cent and 27 per cent respectively. Real estate also saw a rise, particularly among larger offices, which increased investments by 18 per cent. Private equity emerged as the primary growth area, with more families upping their stakes rather than reducing them.
Despite these changes, most family offices have retained their existing strategies. Half have kept bond investments unchanged, and two-thirds have maintained their property investments. This cautious approach can be attributed to external friction and the desire to stick with proven strategies. The Rothschild family, known for their direct involvement and male-only participation in business, exemplifies this hands-on approach.
In response to Trump's 'Independence Day' announcement, nearly two-thirds of family offices made adjustments to safeguard their investments. Despite these changes, a substantial 30 per cent expect returns of 10-15 per cent, with a further 8 per cent anticipating gains above 15 per cent. Almost all surveyed offices foresee portfolio growth in the coming year.
Direct investments are also on the rise, with nearly three-quarters of respondents expressing interest in acquiring direct stakes in companies. However, global trade tensions, largely driven by US President Donald Trump, remain a significant concern for 60 per cent of respondents.
Family offices have demonstrated a clear appetite for risk, increasing investments in private equity and real estate despite external uncertainties. They remain optimistic about portfolio returns, with most expecting growth in the coming year. However, they are also cognizant of global trade tensions and have taken steps to protect their investments.
