The Family Roundup #17

Family office sentiments on asset classes for 2024?
45% are bullish on global developed investment grade fixed income. 

Source: Citi Private Bank Global Family Office Report 2023 

TRENDS

ARE ASIAN FAMILY OFFICES DEFYING GLOBAL TREND TOWARDS DERISKING?

Asian family offices maintain a high-risk appetite, diverging from global trends and shifting towards riskier assets. With about 44% of assets in public and private equity and 30% in cash and fixed income, this is a much bigger differential than family offices in US, Europe or LatAm. Factors like low interest rates, bets on Chinese recovery, and relatively cheaper markets influence this trend. Singapore shines as a key hub for 59% of Asia’s family offices, thanks to proactive regulations and access to diverse regional investments. (CNBC) 

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TRENDS 

ARE FAMILY OFFICES READY? 2024 REGULATIONS RESHAPE INVESTMENT LANDSCAPE 

In 2024, family offices navigate stricter SEC rules for private fund advisers, impacting investment terms and disclosures. The Corporate Transparency Act (CTA) mandates beneficial ownership reporting, altering financial transparency. Increased gift and estate tax exemptions require attention for wealth transfer. IRS scrutiny on Employee Stock Ownership Plans (ESOPs) affects tax strategies. Evolving ESG investment regulations pose challenges, influencing family office investment decisions. (Morgan Lewis) 

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INSIGHTS 

HOW SHOULD FOUNDERS ENGAGE FAMILLY OFFICES WHEN SEEKING INVESTMENT?

Family offices vary widely, encompassing single-family offices (SFOs) managing individual wealth and multi-family offices (MFOs) handling assets for multiple families. Founders should differentiate between SFOs and MFOs, understand their wealth source, generational management, investment aims, and involvement levels. Asking targeted questions about portfolio structure and investment approaches is crucial when engaging family offices for potential investments. (Sifted) 

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TRENDS

UNLOCKING POTENTIAL: HOW MIDDLE EASTERN FAMILY OFFICES PROPEL ECONOMIC GROWTH

UAE expects a $500 billion economic boost from family offices and UHNWIs. Emphasizing operational stability alongside investments, they focus on intergenerational wealth planning amid market uncertainties and challenges in private equity due to high interest rates. Regulatory, technological, and gender diversity trends influence their strategies, drawing global family offices to the UAE as a key financial hub. (Private Banker International)

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INSIGHTS

TIPS FOR SUCCESSFUL VENDOR RELATIONSHIPS 

Require: clear communication, trial periods before committing, regular status updates, document control, and transparent termination when expectations aren’t met. (Janet Arzt for Forbes)

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