BNY Investment Insights for Single Family Offices Study 2024: 189 Single Family Offices with > $250 Million AUM Each & 48% with > $1 Billion AUM, Top of Mind for Family Offices are Expanding Investment Offerings, Tax Planning & Involve Next Generation, Top 3 Investment Risks are Geopolitical Risk, Cybersecurity Threats & Inflation, Family Office Asset Allocation Traditional 55% & Alternative 44%, Top 3 Asset Classes Private Equity (Fund / Direct / VC) 21%, Public Equity 21% & Real Estate 13%, Asset Allocation Breakdown – Public Equity 21%, Public Fixed Income 9%, Cash 8%, Real Estate 13%, Real Assets 4%, Private Equity (Fund / Direct / VC) 27%, Private Credit 6%, Hedge Funds 6%, Crypto 5%, Top 5 Most Interesting Investment Opportunities are Artificial Intelligence, Sustainable Investments, Renewable Energy, Healthcare & Deglobalization
19th July 2024 | Hong Kong
BNY has released the BNY Investment Insights for Single Family Offices Study 2024, providing key insights into 189 single family offices, investments & portfolio allocation. Of the 189 single family offices, 58% of family offices have $250 m to < $1 billion AUM, and 42% of family offices have more than $1 billion AUM. Employees breakdown of family offices – 1 to 10 employees 33.3%, 11 to 20 employees 32.8%. More than 20 employees 33.8%. Family office location – United States 69%, Rest of the World 31%. Top of mind for family offices – Expanding investment offerings, Tax planning, Involve next generation. Top 3 biggest investment risks in next 5 years – Geopolitical risk, Cybersecurity threats, Inflation. Top 3 relevant industry trends for operations & plans – Environmental, Social & Governance (ESG) 100%, Safety & security of assets 99%, Tax-efficient investing 97%. Family offices using Outsourced Investment Advisory Services (AUM below $1 billion) – Yes 76%. Family offices using Outsourced Investment Advisory Services (AUM above $1 billion) – Yes 67%. Top 7 Outsourced investment functions – Risk Management, Portfolio Construction, Performance Measurement, Asset Allocation, Manager Selection, Reporting, Idea Sourcing. Family Office Asset Allocation – Traditional 55%, Alternative 44%. Asset Allocation – Public Equity 21%, Public Fixed Income 9%, Cash 8%, Real Estate 13%, Real Assets 4%, Private Equity (Fund / Direct / VC) 27%, Private Credit 6%, Hedge Funds 6%, Crypto 5%. Top 3 Asset Classes – Private Equity (Fund / Direct / VC) 21%, Public Equity 21%, Real Estate 13%. Top 4 Private market investment priority in next 12 months – Private Equity Growth Equity, Private Credit, Private Equity Buyout, Private Real Estate. Top 5 most interesting investment opportunities in next 5 years – Artificial Intelligence (AI), Sustainable Investments, Renewable Energy, Healthcare, Deglobalization. Top 5 type of technology used in investment decisions: – AI & ML (Artificial Intelligence & Machine Learning), Risk Management, Data Analytics, Consultants, The Cloud. Cryptocurrencies (Actively investing / May increase holdings) – 33%. Top 5 Challenges of Cryptocurrencies – Risk of hacking & cybercrime 77%, Regulatory environment of digital assets is not well-defined 74%, Lack of government endorsement 70%, High volatility 67%, Not a good store of value 66%. Using Tax-managed equity (TME) – Currently using 43%, Considering 30%, Not considering 27%. See below for key findings & summary | View report here
“ 189 Single Family Offices with > $250 Million AUM Each & 48% with > $1 Billion AUM, Top of Mind for Family Offices are Expanding Investment Offerings, Tax Planning & Involve Next Generation, Top 3 Investment Risks are Geopolitical Risk, Cybersecurity Threats & Inflation, Family Office Asset Allocation Traditional 55% & Alternative 44%, Top 3 Asset Classes Private Equity (Fund / Direct / VC) 21%, Public Equity 21% & Real Estate 13%, Asset Allocation Breakdown – Public Equity 21%, Public Fixed Income 9%, Cash 8%, Real Estate 13%, Real Assets 4%, Private Equity (Fund / Direct / VC) 27%, Private Credit 6%, Hedge Funds 6%, Crypto 5%, Top 5 Most Interesting Investment Opportunities are Artificial Intelligence, Sustainable Investments, Renewable Energy, Healthcare & Deglobalization “
BNY Investment Insights for Single Family Offices Study 2024: 189 Single Family Offices with > $250 Million AUM Each & 48% with > $1 Billion AUM, Top of Mind for Family Offices are Expanding Investment Offerings, Tax Planning & Involve Next Generation, Top 3 Investment Risks are Geopolitical Risk, Cybersecurity Threats & Inflation, Family Office Asset Allocation Traditional 55% & Alternative 44%, Top 3 Asset Classes Private Equity (Fund / Direct / VC) 21%, Public Equity 21% & Real Estate 13%, Asset Allocation Breakdown – Public Equity 21%, Public Fixed Income 9%, Cash 8%, Real Estate 13%, Real Assets 4%, Private Equity (Fund / Direct / VC) 27%, Private Credit 6%, Hedge Funds 6%, Crypto 5%, Top 5 Most Interesting Investment Opportunities are Artificial Intelligence, Sustainable Investments, Renewable Energy, Healthcare & Deglobalization
BNY has released the BNY Investment Insights for Single Family Offices Study 2024, providing key insights into 189 single family offices, investments & portfolio allocation. Of the 189 single family offices, 58% of family offices have $250 m to < $1 billion AUM, and 42% of family offices have more than $1 billion AUM. See below for key findings & summary | View report here
Summary
- Total family offices – 189 single family offices with at least $250 million AUM each
- Family offices with $250 m to < $1 billion AUM – 58% of family offices
- Family offices with more than $1 billion AUM – 42% of family offices
- Employees breakdown of family offices – 1 to 10 employees 33.3%, 11 to 20 employees 32.8%,
- More than 20 employees 33.8%
- Family office location – United States 69%, Rest of the World 31%
- Top of mind for family offices – Expanding investment offerings, Tax planning, Involve next generation
- Top 3 biggest investment risks in next 5 years – Geopolitical risk, Cybersecurity threats, Inflation
- Top 3 relevant industry trends for operations & plans – Environmental, Social & Governance (ESG) 100%, Safety & security of assets 99%, Tax-efficient investing 97%
- Family offices using Outsourced Investment Advisory Services (AUM below $1 billion) – Yes 76%
- Family offices using Outsourced Investment Advisory Services (AUM above $1 billion) – Yes 67%
- Top 7 Outsourced investment functions – Risk Management, Portfolio Construction, Performance Measurement, Asset Allocation, Manager Selection, Reporting, Idea Sourcing
- Family Office Asset Allocation – Traditional 55%, Alternative 44%
- Asset Allocation – Public Equity 21%, Public Fixed Income 9%, Cash 8%, Real Estate 13%, Real Assets 4%, Private Equity (Fund / Direct / VC) 27%, Private Credit 6%, Hedge Funds 6%, Crypto 5%
- Top 3 Asset Classes – Private Equity (Fund / Direct / VC) 21%, Public Equity 21%, Real Estate 13%
- Top 4 Private market investment priority in next 12 months – Private Equity Growth Equity, Private Credit, Private Equity Buyout, Private Real Estate
- Top 5 most interesting investment opportunities in next 5 years – Artificial Intelligence (AI), Sustainable Investments, Renewable Energy, Healthcare, Deglobalization
- Top 5 type of technology used in investment decisions: AI & ML (Artificial Intelligence & Machine Learning), Risk Management, Data Analytics, Consultants, The Cloud
- Cryptocurrencies (Actively investing / May increase holdings) – 33%
- Top 5 Challenges of Cryptocurrencies – Risk of hacking & cybercrime 77%, Regulatory environment of digital assets is not well-defined 74%, Lack of government endorsement 70%, High volatility 67%, Not a good store of value 66%
- Using Tax-managed equity (TME) – Currently using 43%, Considering 30%, Not considering 27%
BNY Investment Insights for Single Family Offices Study 2024
Profile:
- Total – 189 single family offices
- Have responsibility for strategic investment & direction for portfolio investments
- Family office manage at least $250 million assets
AUM:
- $250 m to $499 million – 25%
- $500 m to $999 million – 33%
- $1 b to $4.9 billion – 32%
- More than $5 billion – 10%
No. of Employees:
- 1 to 10 employees – 33.3% (63 SFOs)
- 11 to 20 employees – 32.8% (62 SFOs)
- More than 20 employees – 33.8% (64 SFOs)
Geography:
- United States – 69%
- Rest of the World – 31%
1) Family office insights
Top of mind for family offices:
- Expanding investment offerings – 34%
- Tax planning – 19%
- Involve next generation – 14%
Top 3 Biggest investment risks in next 5 years:
- Geopolitical risk – 49%
- Cybersecurity threats – 49%
- Inflation – 41%
Top 3 relevant industry trends for operations & plans:
- Environmental, Social & Governance (ESG) – 100%
- Safety & security of assets – 99%
- Tax-efficient investing – 97%
2) Managing family office investments
Family offices using Outsourced Investment Advisory Services (AUM below $1 billion):
- Yes – 76%
- No – 24%
Family offices using Outsourced Investment Advisory Services (AUM above $1 billion):
- Yes – 67%
- No – 33%
Top 7 Outsourced investment functions:
- Risk Management
- Portfolio Construction
- Performance Measurement
- Asset Allocation
- Manager Selection
- Reporting
- Idea Sourcing
3) Portfolio & Asset Allocation
Family Office Asset Allocation:
- Traditional – 55%
- Alternative – 44%
Combined percentages may not total 100% due to rounding
Asset Allocation:
- Public Equity – 21%
- Public Fixed Income – 9%
- Cash – 8%
- Real Estate – 13%
- Real Assets – 4%
- Private Equity (Fund / Direct / VC) – 27%
- Private Credit – 6%
- Hedge Funds – 6%
- Crypto – 5%
Top 3 Asset Classes:
- Private Equity (Fund / Direct / VC) – 27%
- Public Equity – 21%
- Real Estate – 13%
Top 5 asset classes to increase allocation in the next 12 months (< $1 billion AUM):
- Public Equity – 53%
- Real Estate – 48%
- Private Equity Fund – 45%
- Private Equity Direct – 43%
- Private Credit – 40%
Top 5 asset classes to increase allocation in the next 12 months (> $1 billion AUM):
- Public Equity – 53%
- Real Estate – 43%
- Private Equity Fund – 39%
- Private Equity Direct – 39%
- Private Credit – 35%
4) Private market & Direct investment
Top 4 Private market investment priority in next 12 months:
- Private Equity Growth Equity – 37%
- Private Credit – 19%
- Private Equity Buyout – 14%
- Private Real Estate – 11%
No. of Direct investments in last 12 months:
- 1 to 5 – 30%
- 6 to 10 – 56%
- More than 11 – 6%
- None – 8%
- Total – 100%
Expected no. of Direct investments in next 12 months:
- 1 to 5 – 21%
- 6 to 10 – 52%
- More than 11 – 19%
- None – 8%
- Total – 100%
5) Investment Insights
Top 5 most interesting investment opportunities in next 5 years:
- Artificial Intelligence (AI)
- Sustainable Investments
- Renewable Energy
- Healthcare
- Deglobalization
Type of technology used in investment decisions:
- AI & ML (Artificial Intelligence & Machine Learning) – 58%
- Risk Management – 46%
- Data Analytics – 42%
- Consultants – 35%
- The Cloud – 23%
- Algos – 22%
- Blockchain – 17%
- Robo-advisors – 8%
- None – 13%
Cryptocurrencies:
- No exposure / Not interested – 38%
- Actively investing / May increase holdings – 33%
- Have had limited exposure – 22%
- Exploring but not actively investing – 6%
- Invested previously / No longer interested – 2%
Challenges of Cryptocurrencies:
- Risk of hacking & cybercrime – 77%
- Regulatory environment of digital assets is not well-defined – 74%
- Lack of government endorsement – 70%
- High volatility – 67%
- Not a good store of value – 66%
Why family offices are exploring Cryptocurrencies:
- To keep up with new investment trends – 57%
- Offer good investment opportunities – 51%
- Interest from current leadership of family office – 34%
- Concerns over rising inflation – 30%
- Interest from next generation of family office successors – 30%
6) Risks & Cybersecurity
Top 3 Biggest investment risks in next 5 years:
- Geopolitical risk – 49%
- Cybersecurity threats – 49%
- Inflation – 41%
Cybersecurity best practices:
- Put systems in place to monitor the existence and quality of controls around data traffic, email services on- and off-premises, identity and access. Such services include multifactor authentication, system scanning, patching and configuration.
- Train and test staff with mock hacks and random phishing tests.
- Prepare for incident response with offline backups, printed copies, communication alerts for clients and regulators, backup communication channels and system access and oversight of third-party data.
- Retain the services of external advisors, including incident response specialists, law firms and public relations advisors.
- Review the coverage offered by your cyber insurance.
7) Tax-managed equity (TME)
Using Tax-managed equity (TME):
- Currently using – 43%
- Considering – 30%
- Not considering – 27%
Methodology – This report was a collaborative effort between BNY Wealth and the Harris Poll. The survey design was conceptualized by BNY Wealth, while Harris Poll took charge of recruiting participants and executing the online survey. Both firms contributed to the crafting of the insights and findings. The statistics in this report reflect the feedback of the surveyed 189 family office respondents and they do not reflect the view of BNY. Certain outcomes may be derived from small sample sizes and should be used for directional purposes only. 189 online surveys were completed with key investment personnel at family offices of varied sizes.
BNY
BNY is a global financial services company that helps make money work for the world — managing it, moving it and keeping it safe. For 240 years we have partnered alongside our clients, putting our expertise and platforms to work to help them achieve their ambitions. Today we help over 90% of Fortune 100 companies and nearly all the top 100 banks globally access the money they need. We support governments in funding local projects and work with over 90% of the top 100 pension plans to safeguard investments for millions of individuals, and so much more. As of March 31, 2024, we oversee $48.8 trillion in assets under custody and/or administration and $2.0 trillion in assets under management. BNY is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK)
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