Despite an ongoing pandemic, 76 percent of single family offices performed in live or above target benchmarks this year, as of May-end, according to a recent survey conducted by UBS.

55 percent of family offices rebalanced their portfolios in March, April and May in order to maintain their long-term allocations and this resulted in an average maximum drawdown of just 13 percent. Although 67 percent of family offices haven’t changed their medium-term view, most are looking to make tactical portfolio changes to respond to market shifts. 

«Family offices have behaved differently to others during one of the most volatile periods in the history of financial markets,» said Josef Stadler, head of global family office at UBS Global Wealth Management. 

«In some senses, we saw them take an institutional approach, applying meticulous asset allocation strategies and rigorous investment processes. However uncomfortable it may have been at times, they stuck to their plans and remained disciplined.»

Opportunity Loss

«Yet family offices also embrace and manage risk like no other investor. It is missing an opportunity that gives these clients the biggest headache, not making a loss,» Stadler added. 

Despite concerns about risk, family offices continued to demonstrate strong risk appetite with 77 percent of family office investing in private equity as a key driver of returns (69 percent) with a focus on growth sectors like technology (77 percent) and healthcare (60 percent). Short-term risk appetite is also very strong with two-thirds of family offices trading up to 15 percent of their portfolios tactically.

«This is why they are looking to deploy cash to take advantage of market dislocations. We expect to see big moves in the coming months.»

Rising Sustainability  

Currently, 73 percent of family offices have some form of sustainable investments but the market will likely grow with 39 percent seeking to allocate most of the portfolios in the space in the next five years. 

According to UBS, momentum is strong as demand is backed by «purpose». 62 percent of families regard sustainable investing as important for their legacy while 43 percent view it as their top priority. Priorities for investments include education, healthcare, automation and robotics, and alternative food sources. 

The UBS survey was based on responses from 121 single family offices around the world with a total net worth of $142.4 billion and an average individual family net worth of $1.5 billion.