Specialized insights

Q: Climate change and debt crisis emerge as medium-term risks

The risk of a major geopolitical conflict is clearly the top concern for family offices, both in the near and medium term. Inflation and interest rates are among the other top concerns over the next 12 months but longer term they play a less prominent role. Family offices are more concerned about climate change and high levels of debt over the next five years.

Q: Confidence increases in active management

Family offices say that they are relying more on active management and/or manager selection to diversify portfolios. This comes at a time when the divergence of stock performance has increased. High-quality short duration fixed income is also favored for diversification, especially in the US.

Global family office report 2024

The latest Global Family Office Report is the largest to date, bringing together the insights of 320 single family offices across seven regions of the world.
This report represents families with an average net worth of USD 2.6 billion and covering over USD 600 billion of wealth, confirming it as the most authoritative analysis of this influential group of investors.

Key points

Material shifts in asset allocation as portfolio balance returns

Family offices carried out some of their biggest shifts in strategic asset allocation in 2023, in a move to rebalance portfolios.
In a shift that may reflect elevated bond yields as much as active decision-making, they lifted allocations to developed market fixed income by the largest amount seen in five years.
Allocations to real estate declined at a time when commercial real estate prices in some regions have been falling. Compared to 2023, fewer family offices expect to make changes in 2024.

Climate change and debt crisis emerge as medium-term risks

Geographical asset allocations set to remain tilted towards North America

Family offices have kept their largest regional allocations in North America.
Looking ahead, North America and Asia-Pacific (excluding Greater China) look set to be the top destinations of added allocations, with over a third looking to increase allocations to each of these regions respectively over the next five years.
But there remains a strong home bias, especially in the US followed by Switzerland and Europe.

Confidence increases in active management

With sustainability increasingly commanding attention, family offices seek information and advice

For family offices, sustainability is becoming an essential matter of risk and opportunity.
As many perceive climate change becoming a major concern, so they see sustainability as driving risks and opportunities for both their operating businesses and investment portfolios.
As sustainability requirements become more specific, partly driven by regulation in sectors such as real estate, family offices want more sophisticated information and advice.

Family offices focus on being investment specialists first and foremost

Rather than carrying out the full gamut of tasks to support families, many family offices concentrate mainly on investments in-house.
Most family offices not only make investment decisions but also execute them. They also focus primarily on financial rather than non-financial risks.
With most family offices employing few staff, it is potentially challenging to do anything more than their core tasks.

Dive deeper

The Global Family Office Report 2024 illuminates how family offices around the world are adapting to the latest trends and inflection points.

Download the report

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¹ This guide focuses on the tax rules that apply to collectors. These rules often differ from the rules that apply to artists. In addition, this guide uses the term “bequest” in the colloquial sense—referring to a transfer upon death—rather than its strict legal sense.

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Expiration: 2/29/2024 Review Code: IS2300943

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