According to a UBS and Camden Wealth Show survey, more than half of the world’s richest families expect a recession next year; on the contrary, the Asia-Pacific family offices recorded portfolio returns of 6.2 percent until the end of the second quarter of this year
The economy is able to grow thanks to them too. They are the richest families in the world, making investments and expenses. According to a report by the Swiss bank UBS and specialist business intelligence provider Campden Wealth, these families predict that they will not be able to increase their wealth next year.
The interviewees include 360 family offices, the private wealth management companies of the richest families in the world. According to interviews, 56% of families expect a recession in 2020. The bearish outlook stemmed from concerns about issues such as the US-China trade war and Brexit.
Family offices are considering strategies to preserve wealth
Rebecca Gooch, director of research at Campden Wealth, said: “Family offices are cautious about geopolitical tensions and have a widespread sense that we are reaching the end of the current market cycle. While the average family office has made no changes to the wholesale to their portfolio, many have reduced the leverage of their investments in anticipation of future interruptions “.
As for the family offices examined in the Asia-Pacific region, the report states that 23% of the offices have adopted a conservative “conservationist” investment strategy. Among the causes, according to the interviewees, populism, which gave birth to the presidency of Donald Trump, to protectionist policies and to Brexit.
Another important fact is that of the succession of wealth: according to the report, 49% of the family offices interviewed claimed to have a succession plan in place and UBS estimated that $ 2.4 trillion will be transferred over the next five years from one generation to the next.
The Asia-Pacific family offices recorded overall portfolio returns of 6.2 per cent
The global family offices increase the resources managed to almost 6 trillion dollars and among the most used tools there are direct investments in private equity, in which a family office participates directly in a start-up or in a company. “When you have a direct agreement with you, you are meeting the entrepreneur, the salesman – you are learning the business, the finances,” said an executive with an Asia-Pacific family office.
The report states that 46% of the examined family offices plan to increase their allocations to direct private equity investments in 2020 and 48% expect that they will remain the same. About a third expects to reduce its holdings in developed market shares.
“Right now, we don’t have much faith in things other than bonds and the private sector we have control over,” said the founder of a family office in North America.
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