Family Offices have approximately $10 trillion in assets.  And over the next two decades we are going to experience the largest transfer of wealth in history — roughly $84 trillion.  So it matters what Family Offices do and think.  And below is a synopsis of what Family Offices are doing and thinking.

The Family Office trends for the rest of 2023 will be dominated in large part by inflation and its effects on the global economy.

All these things influence how Family Offices think, invest, and operate.

According to a report from Campden Wealth, more than 3/4 of North American Family Offices grew their wealth in 2022, and more than half of Family Offices grew their assets under management.

Additionally, North American Family Office investments outperformed global peers with 15% average portfolio returns, compared to 10% in Asia-Pacific, and 13% in Europe.

Despite doing relatively well, the report found Family Offices have an increasingly bearish outlook on the economy for 2023, as high inflation persists.

3 out of 4 Family Offices surveyed by Campden Wealth invested in healthcare in 2022, and 39% plan on increasing their investment in 2023.

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%).

Family 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.

A 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.

According to a Morgan Stanley analysis, private equity, venture capital, private credit, private real estate and infrastructure investments have historically overperformed public markets.

Family Offices on average allocate approximately 45% of their portfolios to alternative asset classes.

And according to a UBS report, over 80% of Family Offices invest in private equity.

Of those Family Offices, every year an increasing number of them are making direct investments. Average allocations in private equity continued to rise, from 16% average allocation in 2019 to 21% in 2021.

The reason for the increase in private investing is simple. According to another UBS survey, 74% of families likely to increase their private equity allocations believe these investments will continue to outperform public equities.

The Campden Wealth report found that in North American Family Offices, 30% of Next Gens have already assumed control of their families’ operations, and another 27% are expected to do so within the next decade.

According to Research firm Cerulli Associates, they predict that overall wealth transferred between 2021 and 2045 will total $84.4 trillion.

We are only in the third inning in the evolution of Family Offices. Stay tuned.

#familyoffice #tiger21 #privateequity #realestate #venturecapital

https://www.empaxis.com/blog/family-office-trends