The Family Roundup #16

As markets become more unsettled, 43% say protecting wealth top financial goal.

Source: 2023 EY Global Wealth Management Research Report 

TRENDS

FAMILY OFFICES BANK ON PRIVATE MARKETS FOR FUTURE GROWTH 

The Spears European Family Office Report 2023 shows FOs favour private markets (28% of assets), and despite lower 2022 returns plan increased investments in direct private equity and venture capital. They trust these markets to outperform and focus on sectors like healthcare and fintech. The report emphasizes private markets’ appeal for long-term gains and diversification. (Spears) 

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INSIGHTS 

DOES REPUTATIONAL DUE DILIGENCE SHIELD FAMILY OFFICES IN DIRECT INVESTMENT VENTURES? 

Family offices are venturing into direct investments with higher risks involved. Assessing a company’s reputation is crucial beyond financial metrics, ensuring the protection of the family’s wealth and reputation. Consistent scrutiny in this regard maintains the family’s standing, mitigates potential issues, and aids in navigating intricate investment regulations. (Thomson Reuters) 

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INSIGHTS 

ARE EMPLOYEE EXPENSES THE CORE OF FAMILY OFFICE COSTS?

The operational costs of Family Offices range from 0.1% to 0.5% of the Asset Under Management (AUM). Larger offices benefit from scale, reducing % AUM costs. Services offered impact expenses, with investment-focused offices spending more than trustee and philanthropic ones. Employee costs, around 69% of expenses, stress the need for skilled professionals, especially in investment management. (Paul Westall for Forbes) 

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NEWS

GCC WEALTH FIRM LAUNCHES ILLIQUID ASSET MARKETPLACE 

The Family Office in the GCC has launched a new Marketplace, enabling clients to trade illiquid assets like private equity and real estate with increased flexibility. Investors can now manage portfolio concentration and access liquidity easily. Sellers list deals, specifying shares and prices, while investors bid on opportunities, ensuring fairness in the transparent bidding process. (Zawya) 

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TRENDS

IS 2024 THE YEAR FOR INSTITUTIONAL DIGITAL ASSET EVOLUTION? 

Digital assets like Bitcoin and Ethereum are drawing institutional interest with CoinDesk’s acquisition and growing family office participation. Anticipated regulatory shifts, Bitcoin ETF approval, stablecoins, and tokenization indicate market expansion and stability. However, regulatory uncertainties and market volatility underscore the need for expert guidance in navigating this evolving landscape. (Francois Botha for Forbes) 

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