The Family Office Roundup #29

Source: Capgemini World Wealth Report 2024, page 12

REPORT

CAPGEMINI: WORLD WEATH REPORT 2024 

Highlights include: 

• Survey finds that primary asset allocation has moved from preservation to growth – cash holdings have been normalised at 25% and fixed income portfolios have increased to 20%. 
• 68% of HNWIs plan to increase investments in private equity in 2024. 
• Of the wealth management firms surveyed, 49% use AI in some areas, while 73% plan to increase adoption at the enterprise level over the next two years. 
• Recommendation based on the report includes that wealth management firms must become one-stop shops that provide a suite of products and services. This could be done by integration third party partners to deliver services vua clients’ preferred channels. 

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REPORT 

BNY MELLON: GLOBAL FAMILY OFFICE REPORT 2024 

Highlights include: 

• Over 60% of family office portfolios are currently allocated to three asset classes: Private Equity (fund, direct and venture capital), Public Equity and Real Estate.  
• 78% of family offices see AI as one of the top 3 investments for the next five years. 
• Geopolitical risks (49%), cyberthreats (49%), and inflation (41%) are considered the biggest risks to their investment portfolio over the next five years. 
• 72% of family offices report outsourcing investment advisory services. 

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INSIGHTS

HNWIs INVEST INTO TACKLING CLIMATE CHANGE 

Globally, nearly half of family offices are investing in sustainability, with clean energy sectors such as geothermal, wave, and hydrogen energy also attracting interest. Despite some scepticism about the returns on sustainable investments, wealth and asset managers emphasize that ESG funds can match traditional investment returns. This shift signifies a growing mainstream investment strategy in ESG funds. (David Oakley, Financial Times) 

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INSIGHTS

HOW INDEPENDENT IS YOUR MFO? 

The article covers the importance of independence in MFOs, as they do not sell proprietary products or strategies. They sell advice. The article offers questions that one could ask for MFOs to gauge the level of independence and ensure an objective wealth strategy. (Jeff Noble, Canadian Family Offices) 

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INSIGHTS 

INVESTING IN SUSTAINABLE REAL ESTATE 

Family offices are increasingly investing in sustainable real estate, influenced by generational preferences. Sustainable practices in real estate, such as energy efficiency, water conservation, and use of renewable materials, offer various benefits. Despite challenges like higher initial costs, the long-term advantages and market demand for sustainable properties are driving growth in this sector. (DJ Van Keuren on LinkedIn) 

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