Citi survey: Family offices reassessing asset allocations, professionalizing investment functions

Marcus Baram
Author Marcus Baram
Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.
Sep 13, 2023
2 weeks ago
Print
family_office

Amid concerns about inflation, interest rate increases and U.S.-China relations, family offices have reassessed their allocation of assets in recent years — moving more money into fixed income and private equity and taking money out of the public markets.

About half of the 268 family office clients surveyed by Citi Private Bank for its annual Global Family Office Survey Insights report said they increased fixed-income allocations, 38% increased private equity allocations, and 38% cut their public equity allocations.

Overall, family offices were optimistic about the year ahead, with two-thirds of respondents expecting market-to-market portfolio increases and nearly all of them looking for positive portfolio returns over the next 12 months.

Among other findings from the report:

  • Direct investments: 80% of family offices engaged in direct investments, while 66% said they were “seeking opportunistic deals based on attractive valuations,” and 38% said they had paused new direct investments due to economic uncertainty.
  • The investment function is professionalizing fastest within family offices: 64% have implemented investment committees and investment policy statements (51%) but are slower when it comes to professionalizing other activities, such as governing boards (48%) and leadership succession plans (31%). Only 32% have a family constitution, 28% have a family leadership succession plan, and 21% have a next-gen education program. “The latter two are the most concerning,” Citi said in the report.
  • Looking forward, the family offices surveyed were most bullish on global developed investment-grade fixed income, private credit, cash and direct private equity and most bearish on crypto assets, real estate and global developed investment high-yield income.family_offices

     

Marcus Baram
Author Marcus Baram
Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.