Ocorian: Family offices increasingly focus on alternatives
Growing investment sophistication is helping to drive a rise in risk appetite at family offices and an increased focus on alternative assets, new global research from service provider Ocorian shows.
More than three out of four (76%) questioned believe increasing sophistication at family offices is leading to more staff carrying out more sophisticated deals and having to strengthen their operational infrastructure. That is contributing to an increased risk appetite – around 66% questioned say their organisation’s risk appetite will increase in the next 12 months, Ocorian’s study among family members, senior family office employees and intermediaries working for family offices with total wealth of $68.26 billion found. Just 7% believe their organisation’s risk appetite will decrease while 27% say it will stay the same. European equities, emerging market equities and private equity are the most popular asset classes that family office fund managers expect to increase allocations to in the next 12 months.
There is a growing appetite for increasing family office exposure to alternative assets – all of those questioned agreed it is a long-term trend – with 65% saying the UK is leading the way on exposure to alternatives based on where assets or where family offices are based. More than half (54%) point to the Middle East while 48% highlight the European Union. Around a third (31%) say Africa but only 24% the Americas.
The study in 13 countries or territories including the UK, UAE, Singapore, Switzerland, Hong Kong, South Africa, Saudi Arabia, Mauritius and Bahrain found increased regulation around riskier and more specialist asset classes is the main reason for increased risk appetites ahead of any investment views.
Around three quarters (73%) pointed to improved regulation while 60% point to increased transparency. There is however a need for regulatory support – just one in six (16%) questioned believe they are in a strong position to meet regulatory demands amid rising complexity while 56% say they are in quite a strong position. More than a quarter (27%) believe their ability to meet regulatory requirements is average.