The investment strategies of family offices are shifting as younger generations take a bigger role in determining their families’ investments, according to a new report from family office service provider Ocorian Ltd. and research firm PureProfile.
Ocorian surveyed 200 family members and family office senior executives, who collectively manage $119.37 billion in assets. Of those respondents, 97% said younger generations’ investment priorities differ from those of their elders, leaning more toward private markets, digital assets and physical assets. Not surprisingly, 79% said younger generations are becoming more involved with developing and reviewing investment strategies.
Approximately 51% of survey respondents said younger generations are more interested in alternative investments, while 42% of respondents reported younger generations had interest in investing in digital assets.
Younger generations also want more emphasis on buying physical assets, such as real estate and private aircraft, according to the report, with 39% of respondents noting this. Overall, 29% of respondents said that younger generations had a higher investment risk appetite.
The survey also found that 33% of respondents agreed that younger generations have differing views on geopolitical issues than older generations, and 9% said younger generations had different opinions about where their family offices are located.
In addition to those differences, succession planning is an important issue at almost every family office: 98% of respondents said more succession planning needs to be done. Approximately 12% of respondents said they do not observe a natural plan for succession in wealth and leadership at their firm.
“Succession planning is crucial in family offices as they grow and mature and it is to some extent inevitable that younger generations will have different views and approaches on investment from the founders,” said Ginny Go, Ocorian’s director of private clients, in a statement. “As the family’s wealth expands and its priorities diversify, the need for a structured, forward-looking succession framework becomes even more essential.”
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Tags: Family Offices