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Alternative Market Briefing

Typical family offices invest 11% of portfolio into hedge funds

Thursday, May 26, 2016

Komfie Manalo, Opalesque Asia:

A survey by Peltz International has found that hedge funds account for 11% of typical family office portfolio. About a third of family offices’ portfolio comprise of equities, while bonds accounted for another 11%. Real estate accounted for 9.8% and private equity was another 5.0%, the study has shown.

Peltz conducted the survey on family offices to provide a snapshot look at family offices' views on investing in today's environment. Around 65% of those interviewed were single family offices and 35% were multi-family offices. The respondents were primarily U.S.-based with an average asset size of $7.6bn. When one large outlier was removed, the average assets fell to $1.4bn.

Lois Peltz, author of the report, observed, "In the survey, we found multi-family offices prefer equity long/short and structured credit. Whereas single family offices had more diverse preferences than the multi-family offices, equity long/short was also the most preferred strategy."

The survey also found that the typical family office has been in existence 17.4 years. The range went from three years to 85 years. Not surprisingly, wealth preservation was the most frequently mentioned goal (25%) with growth coming in second (19%). The average target rate of return for the families surveyed was 12.5%, the survey added.

Long/short equity is preferred hedge fund strategy

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