[UBS UBS] 2024 Global Family Office Report Asia-Pacific will become the preferred investment destination for global family offices

Portfolios shifted to a more balanced allocation, with fixed income allocations to developed markets at their highest in five years. As a diversified investment strategy, investors have increased their confidence in active management, and artificial intelligence (AI) is the primary investment theme of concern. Alternative investments continue to form an important part of investment portfolios, providing an additional source of diversification and return.

Portfolio Shifts to More Balanced Allocations to fixed income in developed markets are at their highest in five years.
As a diversified investment strategy, investors have increased confidence in active management, and artificial intelligence (AI) is the primary investment theme of concern.
Alternative investments continue to form an important part of investment portfolios, providing an additional source of diversification and return.
UBS today released the \”Global Family Office Report 2024\”, a survey of 320 single family offices from seven regions around the world.
The total net wealth of the family offices surveyed exceeded US$600 billion, and the average total net wealth was US$2.6 billion, confirming that this report is the most comprehensive and authoritative study of this group of influential investors.
At the same time, the number of respondents in the Asia-Pacific region was the highest among all regions in this survey.
Benjamin Cavalli, head of strategic clients at UBS Wealth Management, emphasized: “The expanded global comprehensive data allows us to analyze more deeply and further understand how family offices’ operations affect their asset allocation. It also allows us to provide them with tailor-made solutions. research results and recommendations.
\”As the Asia-Pacific region will become the world\’s largest investment hotspot, nearly half of family offices in the Asia-Pacific region plan to increase their asset allocation to the Asia-Pacific region in the next five years,\” said Liangxiong Ku, head of global family and institutional wealth Asia Pacific at UBS.
Asia Pacific family offices plan to increase allocations to private equity, fixed income and equity and hedge funds in developed markets over the next five years.
Among them, private equity and hedge funds remain the favorites of family offices because they can maintain portfolio diversification and obtain better investment returns.
Healthcare is the most popular sustainability theme among family offices in Asia Pacific when it comes to creating positive impact.
With UBS\’s unique global family and institutional wealth division, we are able to better understand this important client segment and provide them with a fully integrated platform to meet their personal, family and institutional needs.
Allocations shifted to more even portfolio geographies with a tilt toward Asia-Pacific, according to the 2024 survey, which showed family office portfolios returned to a greater balance between bonds and equities.
Asia Pacific family offices are keen to add more exposure to developed markets fixed income (48%) and developed markets equities (45%).
Asia Pacific family offices plan to increase their allocations to private equity (24% direct investments and 32% funds/funds of funds), private debt (28%) and hedge funds (31%) over the next five years, reflecting their There is a greater need for diversification and diversification.
On average the highest regional allocations for family offices remain in North America (50%) with more than a quarter in Western Europe (27%) and Asia Pacific or Greater China at 17%.
Looking ahead North America and Asia Pacific (excluding Greater China) will be popular regions for increased allocations with more than a third of respondents expecting to increase allocations to these regions over the next five years (38% and 35% respectively).
Diversification through active management Generative artificial intelligence is a top investment theme, just as balanced portfolios are back in favor, so is active management.
Dispersed returns in the context of rapid technological change, changing interest rate expectations and uneven growth provide opportunities for active management.
Nearly four in ten (39%) of family offices globally say they currently rely more on investment manager selection and/or active management to enhance portfolio diversification, a 4% increase from 2023.
When it comes to alternative investments, a third (33%) of family offices use hedge funds to diversify their investments.
In terms of investment themes, generative artificial intelligence is the most popular investment theme. More than three-quarters (78%) of family offices say it is likely to be one of the investment themes in the next two to three years.
As family offices increasingly pay attention to sustainable development and seek more precise investment methods, sustainability is becoming an increasingly important issue, affecting not only the investment portfolio of the family office but also the long-term prospects of the companies it operates.
Philanthropy and charitable giving are particularly popular in Asia Pacific, with 45% of family offices saying they are currently considering the topic.
Healthcare is also the top theme for family offices in Asia Pacific (59%).
Other key sustainability themes considered by family offices in Asia Pacific include cleantech/greentech/climatetech (40%) and philanthropy (39%).
Asia Pacific family offices are more likely than their global peers to focus on impact investing (36%), education (36%) and carbon markets/carbon capture and removal (21%).
Regional findings: United States: On average, U.S. family offices have the lowest allocation to fixed income (7%) with 59% of family offices holding fixed income saying they do so to benefit from higher yields.
Their portfolios are tilted most towards North America (82%) and Western Europe on average only 8%.
High-quality short-term fixed income is the most popular diversifier in the U.S. (47%).
83% of U.S. family offices say they are likely to invest in artificial intelligence.
The main concern for U.S. family offices in the next 12 months is major geopolitical conflicts (57%).
The biggest concern among U.S. family offices over the next five years is higher taxes (73%).
Latin America: Latin American family offices have the highest average allocation to fixed income compared to their global peers (27% for developed market bonds and 7% for emerging market bonds).
Investors hold fixed income investments primarily to preserve capital (63%), help balance risk (58%) and benefit from higher yields (54%).
On average, Latin America holds the least cash (5%).
Their top concern over the next 12 months is inflation (60%) and over the next five years their main concerns are climate change (48%) and innovative technologies impacting their operations and/or investments (48 %).
Southeast Asia: 88% of family offices in Southeast Asia believe real interest rates will remain positive for longer.
They rely more heavily on investment manager selection and/or active management for diversification (50%).
Their allocation to real estate is on average the lowest (6%) compared to global peers.
Major geopolitical conflicts and rising inflation are top concerns over the next 12 months (55% each) while issues over the next five years are higher taxes (59%) and climate change (56%).
North Asia: North Asia family offices hold more cash on average (14%) and have the highest allocation to Greater China of all regions (24%).
They are most likely to invest in artificial intelligence in the next two to three years compared to their global peers (89%).
They prefer high-quality short-term fixed income to enhance portfolio diversification (45%).
The main concern for family offices in North Asia over the past 12 months and over the next five years is major geopolitical conflicts (56% and 70% respectively).
Europe (excluding Switzerland): 38% of European family offices believe U.S. real interest rates will fluctuate around zero.
The proportion of family offices planning to change strategic asset allocation in 2024 is highest in Europe compared to global peers (42%) On average family offices allocating portfolios to Western Europe have a strong home bias (49%).
Europe has the highest proportion of family office financial risk coverage (67%) compared to global peers.
The main concern for European family offices now and over the next five years is major geopolitical conflicts (61% and 71% respectively).
Switzerland: A similar 38% of Swiss family offices believe U.S. real interest rates will fluctuate around zero.
They have the highest average allocation to equities compared with global peers (29% developed markets and 2% emerging markets), with only 11% planning to change strategic asset allocations in 2024.
Swiss family offices have a strong home bias, allocating an average of 54% of their portfolios to Western Europe and using precious metals to enhance their portfolio diversification (34%).
76% of Swiss family offices are likely to invest in healthtech within the next two to three years.
The main concern among Swiss family offices in the past 12 months and over the next five years is major geopolitical conflicts (62% and 71% respectively).
Middle East: Middle East family offices have the highest average allocation to real estate (15%) compared to global peers and use high-quality short-term fixed income to enhance portfolio diversification at a lower proportion than global peers (10%).
Their main concern over the next 12 months is major geopolitical conflicts (68%) and their top concern over the next five years is a financial market crisis (57%).

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