Increased regulation around risky assets is seen as a driving force behind family offices planning to expand their allocations for alternative investments over the next year.
Ocorian’s global study of more than 300 family office professionals found that 82% of respondents think that their organization’s appetite for risk will increase over the next 12 months. Around 62% who expect a rise in investment risk say increased regulation around riskier assets is the key reason for their higher risk tolerance, while 55% said their greater risk appetite stems from their belief that inflation has or will soon peak.
“Family offices’ appetite for risk is increasing rapidly after many years when many were heavily focused on cash and took a very cautious approach to investing,” said Annerien Hurter, global head of private client at Ocorian. “The long-term trend of family offices increasing their exposure to alternative asset classes is certainly a factor in the growing appetite for risk, and it is clear that improvements in regulation around riskier assets is proving popular with family offices.”
The alternative asset classes projected to see the biggest growth in family office allocations over the next two years are infrastructure and private debt. Among those surveyed, 26% expect infrastructure allocations to jump at least 50%, while 23% expect the same increase for private debt.
Ocorian’s study spanned family offices that have combined assets under management of $155 billion. The survey encompassed responses from 309 family office investment managers, 201 of whom work for multi-family offices.