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Investment strategy and sentiment

 

Key takeaways

Increase in high quality fixed income and alternatives allocations

Top concerns were inflation, interest rate rises and US-China relations

Portfolio values have rebounded in 2023 after 2022’s declines

Nearly all respondents expected portfolio upside in coming year

Download Global Family Office Survey Insights 2023 (PDF 9.83 MB)

Amid rising financial markets and unrealized fears of recession in 2023, many family offices have shifted their asset allocation more than in recent years, taking both defensive and more risk-seeking positions.

Notably, over half reported increases to fixed income allocations, with 38% allocating more to private equity, while 38% retreated from public equity. This represents a departure from the typical pattern of family offices taking a long-term view, deploying patient capital and making marginal short-term adjustments.

Inflation (56%), interest rate increases (51%) and US-China relations (48%) are family offices’ top three concerns in relation to financial markets and the economy. But these priorities vary by region, with rate increases the main concern in North America (64%), the Russia-Ukraine War in Europe and the Middle East (52%), US-China relations in Asia Pacific (64%) and inflation in Latin America (63%).
Remarkably,  nearly all respondents were expecting positive portfolio returns over the next 12 months.

With widespread predictions of recession so far unrealized, mark-to-market portfolio values have rebounded following last year’s losses. Two-thirds of family offices reported year-to-date portfolio increases.

Remarkably, nearly all respondents were expecting positive portfolio returns over the next 12 months.

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