Family offices are rediscovering their risk appetites in search of improved returns as they count the cost of being overweight in cash over the past two years, new global research* from Ocorian, the specialist global provider of services to high net worth individuals and family offices, financial institutions, asset managers, corporates, shows.
Its international study with more than 130 family office investment managers responsible for around $62.425 billion assets under management found 87% are predicting an increase in the risk appetite of their clients over the year ahead. Around a third (31%) forecast a dramatic increase in family offices risk appetite.
The research from Ocorian, which works with more than 60 family offices around the world, found the key reasons for the change in attitude are optimism about the global economy. Around 57% questioned say there is a feeling inflation has peaked while 54% believe markets are over the worst and set for recovery.
However there is also growing interest in alternative assets and riskier investments in general. More than half (56%) say there is greater transparency around riskier and more specialist asset classes such as digital assets while 42% are encouraged by improved regulation in the sector.
It is a stark contrast to the past two years which saw many family offices and High Net Worth families focus on cash. Almost all (99%) family offices questioned – which included single and multi-family offices and only those who use third-party private client service providers – agreed family offices have been overweight in cash for the past two years and are now ready to invest again.
The research for Ocorian, which provides services to HNW individuals and family offices as well as financial institutions, corporates and asset managers, found emerging market equities and investment-grade fixed income are the asset classes likely to see the most dramatic increases in allocations. US equities plus alternative assets including hedge funds, private equity and private debt are also likely to see dramatic increases in allocations over the next 12 months.
Amy Collins, Head of Family Office at Ocorian, said: “Family offices have quite rightly taken a conservative approach to risk in the past two years given the high levels of volatility and uncertainty in global markets. That, however, is changing and there is an increasing appetite for risk across the sector as they look for higher returns.
“It is further evidence of the strong growth in the sector as more family offices are established and more family members want to play an active role in managing their assets in the most efficient way. Many family offices, particularly those run by younger, tech-savvy generations, are interested in investing in technology companies and other sectors they know well. This requires a deeper understanding of emerging technologies – from digital assets, space technology investments, web 3.0, cyber security, and so forth – and importantly, a willingness to take on higher levels of risk.”
Ocorian’s award-winning dedicated family office team provides a seamless and holistic approach to the challenges and opportunities families face. Its service is built on long-term personal relationships that are founded on a deep understanding of what matters to family office clients. Its global presence means Ocorian can provide bespoke structures and services for international families no matter where they live.
Its family office team offers tailored, practical solutions that are flexible enough to adapt to changing family circumstances. They can act as an outsourced family office or multi-family office, providing support around issues such as managing investments, running family homes and philanthropy. It has dedicated family office teams in key jurisdictions including Jersey, Guernsey, London, Singapore, the UAE and Mauritius.
Areas they provide support for include:
- Administration of liquid and illiquid investments and banking relationships
- Consolidated asset and liability reporting
- Management of ownership structures
- Luxury assets
- Family homes
- Personal financial management
- Family governance
- Private capital
For more information on Ocorian's family office offering, reach out directly to the team.
*Ocorian commissioned independent research company PureProfile to interview 134 family office investment managers working for family offices which use third-party private client services providers to support in the preservation and protection of their clients’ wealth. The investment managers interviewed are responsible for assets under management of $62.45 billion and include 63 working for multi-family offices. The global study interviewed family offices in the US, UK, Canada, China, Germany, India, Norway, Saudi Arabia, Singapore, South Africa, Sweden Switzerland, UAE, Denmark, France and Japan.