Asia-Pacific family offices led the way in deploying more to public equity, or publicly traded companies, said a survey. — The Straits Times
SINGAPORE: Family offices are shifting their cash towards bonds, and public and private equity, with almost half expecting returns above 10% over the next 12 months.
Public equity allocations were similar globally – between 26% and 30%. Allocations to private credit and real estate funds were also at comparable levels of around 2%.
Bond allocations varied across the globe, with offices in the Asia-Pacific (Apac) and Latin America giving it more emphasis compared with the other regions.
Apac family offices – entities that manage the wealth of the super rich – led the way in deploying more to public equity, or publicly traded companies, said Citi private bank’s 2024 family office survey on Sept 18.
About 68% in the region reported increased allocations to public equity, the highest relative to other parts of the world. Only 32% in North America did so.
About 42% of Apac family offices raised allocations to fixed income while 39% increased allocations to private equity or non-listed companies.
The asset class that saw the least change across every region was real estate.
Nearly 40% of all family offices in Europe, the Middle East and Africa, Latin America and the Apac cut their weighting in cash, compared with 30% in North America.
The survey drew responses from 338 offices worldwide with about 20% of respondents from the Apac. Half of the respondents had more than US$500mil in assets under management (AUM).
Relations between the United States and China were a top concern for Apac family offices. This was followed by expensive markets, inflation, interest rates and stability of the global financial system as well as trade disputes and currency risks.
The Middle East conflicts and the Russia-Ukraine war remained worrisome, but to a lesser extent in the Apac.
For the first time since 2021, inflation was no longer a top concern globally. Instead, the outlook for interest rates was the main worry for more than half of the respondents worldwide. This was followed by US-China relations, market overvaluation and inflation.
Globally, worries over the Middle East conflict were more prominent than those surrounding the Russia-Ukraine war.
When it came to portfolio performance, family offices in the Apac saw the highest proportion of negative performance while those in Latin America saw the biggest increases.
The survey said family offices with over US$500mil in AUM tended to report positive portfolio performance more than smaller ones. Family offices in the region were the most bullish about direct private equity and private equity funds and developed market equities. — The Straits Times/ANN
