Majority of respondents in the annual Family Office Survey seek increased returns of 5% or more next year
Citi Private Bank’s Private Capital Group today released the results of its 2021 Family Office Survey, compiling the unique perspectives and insights of many of the world’s sophisticated family offices and ultra-high net worth investors in a challenging climate. This year’s survey included nearly 200 responses, an 11% increase from 2020.
Four predominant themes emerged: 1) concern on rising inflation, 2) the prominence of high cash levels in the face of low yield environment, 3) continued growth in portfolio allocation to direct investing opportunities, and 4) a marked comeback in portfolio values year over year despite prevalent degree of macroeconomic uncertainty.
While over three-fourths of all respondents seek returns of 5% or more over the next 12 months, the outlook is more optimistic for family offices with AUM over $500 million with 30% seeking over 10% returns versus 19% of family offices with AUM under $500 million. This likely factors in the additional institutional tools and market access that family offices with higher AUM can leverage.
The 2021 Family Office Survey also recorded rising interest in direct investing in private enterprise and offers reaffirmation of many family offices increasingly buying directly into corporate capital structures. The survey shows that for almost half of the participants this kind of exposure represents 25% or more of their overall allocation.
“In these unusual times, our exclusive survey offers an invaluable glimpse of the thinking of family offices and other leading investors,” said Ida Liu, Global Head of Private Banking. “It’s reassuring to note that investor sentiment isn’t negative. Instead, family offices have weathered the COVID crisis well and are uniquely positioned to deploy further capital as they see opportunities arise. We stand ready to offer them our fullest support in the emerging post-pandemic landscape.”
“Among our many intriguing findings, it’s the rise of direct investing in private enterprise that reflects deep confidence in the flexibility and strength of the global economy,” said James Holder, Global Head of Citi Private Capital Group, Citi Private Bank. “It also underlines the vital role family offices and private capital play in supporting innovation, entrepreneurship, development of the stakeholder economy, creating jobs and new solutions to the challenges of our day.”
Also of note, the 2021 Family Office Survey found that two-thirds of respondents responded as ‘overweight’ or ‘neutral’ when it came to commodities in their portfolios, and there was also a continued shift in interest in emerging market equities.
This year’s survey was once again conducted during Citi Private Bank’s Sixth Annual Family Office Leadership Program held virtually in June 2021. The total number of survey respondents increased this year to 197 (versus 177 in 2020). Of those, 79% were family offices; an increase of 24% year-over-year.
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