Cash allocations are on the rise at family offices worldwide, according to a Citi report, with Asia Pacific leading the shift.
The ultra-rich in the Asia Pacific region are cutting risk with 54 percent of family offices increasing their cash allocation, according to Citi’s «Global Family Office Survey Insights 2023». 23 percent reduced their cash allocations while another 23 percent made no changes.
APAC was the leading region in terms of family offices boosting cash allocations, followed by North America (51 percent), EMEA (40 percent) and Latin America (34 percent). With the exception of Latin America – a region undergoing strong inflationary pressures – most family offices in all regions decided to increase cash allocations.
Portfolio Losses
In addition to future uncertainty, APAC family offices may have also been affected by recent history, specifically with regards to investment performance.
According to the report, APAC was the regional leader in reported portfolio declines at 36 percent. 8 percent of respondents said there was no change while 56 percent reported positive performance.
EMEA was the region with the second most losses (32 percent of family offices reported negative performance), followed by North America (23 percent) and Latin America (18 percent).
US-China Relations
And in terms of market concerns, APAC family offices selected US-China relations as the top worry (64 percent). Within the region, this is followed by inflation (50 percent), global financial system stability (48 percent), interest rate increases (42 percent) and market volatility (34 percent).
Elsewhere, the top concern was interest rate hikes in North America (64 percent), the Russia-Ukraine war in EMEA (52 percent) and inflation in Latin America (63 percent).
