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Alternative Market Briefing

Family offices reduce hedge funds, include more impact investing as succession becomes greater challenge

Monday, September 12, 2016

Komfie Manalo, Opalesque Asia:

Family offices are reducing their holdings in hedge funds and adding private equity. A study by UBS Group AG in tandem with London-based research firm Campden Wealth has found that private equity investments have become even more central to family offices over the past year and now represent close to a quarter of the average overall portfolio.

Multi-year participants have recorded a 2.3 percentage point increase in holdings of private equity investments to 22.1%. Meanwhile, the average family office reduced its holdings in hedge funds from 9 percent to 8.1% last year amid concerns about performance and fees.

UBS vice chairman of Global Family Office Group Philip Higson, commented, "Most family offices can trace their roots back to the growth and success of a single business, and as a consequence you will often find an emotional desire to back entrepreneurs and ideas they believe in. Strong performance from private equity over the last five years has only served to strengthen this natural affiliation."

Impact investing is driven by Millennials

The study said that a significant 61% of family offices are now active or expect to be active in impact investing in the foreseeable future. Millennials are a key catalyst for this change, with two-thirds of participants agreeing that fami......................

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