Family offices and the ways they invest capital have changed significantly over the past 10 years. With increasingly sophisticated investment strategies combined with compressed yields and an ever-changing regulatory, risk and ESG landscape, what does family office asset allocation look like today and what does the future hold?
This was the focus of IQ-EQ’s virtual roundtable in November 2020, where I (as moderator) was joined by 12 senior experts from across the family office sphere – representing investment managers, advisors and service providers as well as family offices themselves.
It is striking the extent to which the number of family offices globally has grown over the past decade; the UBS Global Family Office Report reveals that 35% of all family offices have launched since 2010. Over a similar time period, as family wealth has grown, so too has the job of managing those assets. We’ve seen family offices evolve from opportunistic investors leveraging the family’s own business or sector expertise into much more sophisticated, professional and well governed operations, disciplined in their investment approach.
Naturally, the search for yield remains front and centre for every family office, particularly amid the current global market turbulence, and as this hunt becomes ever more challenging, we’re increasingly seeing family offices shift their investment focus in favour of alternative assets.
Added to this, other factors are having an ever-greater influence on family office asset allocation decisions. These include heightened risk considerations in today’s heavily regulated investment environment, the rise of sustainable and socially responsible investing, and the upcoming ‘great wealth transfer’ that will see trillions of dollars’ worth of family wealth change hands between generations within the next 10 to 20 years.
During our IQ-EQ roundtable, these four key themes were each discussed in depth, with a broad range of perspectives shared. A detailed narrative of the key insights voiced throughout this interesting and lively session is now available to download: