Family offices are diving into new markets

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'Family offices continue to re-evaluate traditional approaches to investing accelerating interest in making direct investments in real estate and operating businesses.'

Sat, Aug 03, 2019 - 5:50 AMHolding cash is unattractive, as banks such as UBS start charging for large deposits, and the rally in equity and bond prices looks at odds with many fundamentals. "It's the hardest investing climate I have ever seen in my career in public markets now... So it's all about real assets now, and being creative." A luminary of one of America's largest family offices.A TRANSACTION occurred on Wednesday that should give investors pause.

It is not easy to monitor such financial flows with precision, since the family office sector - which is estimated to control almost US$6 trillion in assets - is highly secretive. However, financiers say that a shift is under way.A few decades ago, the sector put most of its money in public bond and equity markets, with a smaller allocation to real estate.Then investing in hedge funds became all the rage. But a survey conducted late last year by UBS bank and Campden Wealth suggests just 5.

This means that family offices are no longer just investing in private equity funds , but increasingly cutting direct deals. Moreover, 73 per cent are doing this in what the exchange calls an"opportunistic way", up from 54 per cent last year. That is, they are grabbing unorthodox avenues for higher returns, whenever they materialise.

 

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