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Alternative Market Briefing

Family office allocations into alternatives continue to rise, says study

Wednesday, July 27, 2022

Laxman Pai, Opalesque Asia:

Global Investment Survey, focusing on the investment sentiments and activities of global family office CIOs over the past year, conducted by Family Office Exchange (FOX) revealed that allocation into direct private equity continues to rise.

In 2021, enterprise families shifted funds out of cash and hedge funds and into private equity (PE), venture capital (VC), and direct investments-portfolio allocations to direct PE were up 5 percentage points year-over-year, the report said.

"These asset classes are better equipped to serve the unique needs of multi-generational families. They are seen as attractive vehicles to deliver incremental returns, diversify away from the public markets and offer direct exposure to impact investments and opportunities to educate and engage rising-gen family members."

The survey results also show family investors at a turning point. At the time of the survey, following two years of record returns, respondents faced the compounding threats of global geopolitical instability, fast-rising inflation, and the very real prospects of economic recession over the coming year.

As a result, 93% of respondents indicated they expect high or extremely high market volatility in 2022. At the same time, 44% expect the economy to improve, and 61% are bullish about the markets in the year ahead.

Meanwhile, the FOX study showed a significant disparity between smaller family offices-those with fewer than 7 em......................

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