Family Offices Show Strong Bullish Sentiment According to Recent Survey
Family offices are displaying strong optimism as they allocate their cash towards Stocks and alternative investments amidst interest rate cuts by the Federal Reserve, as per a recent survey. According to Citi Private Bank’s 2024 Global Family Office Survey, 97% of family offices anticipate positive returns this year, with nearly half of them expecting double-digit gains. This bullish outlook signifies a heightened risk appetite among family offices, marking a shift from their conservative stance in previous years.
The survey reveals a growing interest in private equity among family offices, with 47% planning to increase their allocation to direct private equity in the next year. Additionally, 39% of family offices intend to boost their exposure to developed-market equities, particularly in the U.S. Public equities remain their largest holding by asset class, accounting for 28% of their typical portfolio.
As Interest rates decline, family offices are also increasing their fixed-income exposure, with half of the surveyed offices adding to their fixed-income holdings last year. With the S&P 500 index up nearly 20% year-to-date, family offices are optimistic about strong returns by the end of 2024. However, concerns over Interest rates, U.S.-China relations, and market overvaluation persist as potential risks to their upbeat outlook.
Moreover, family offices are increasingly turning to alternative investments such as private equity, venture capital, real estate, and hedge funds, which now make up 40% of their portfolios. Notably, AI investments have emerged as a prominent theme among family offices, with a significant number of them already having exposure to AI through various investment avenues. Compared to other investment trends like crypto and ESG, AI is garnering substantial interest and investment from family offices, indicating a shift towards more substantial and long-term investments in emerging technologies.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.