Family offices globally further reduced cash holdings in the second quarter of 2024 to add allocations to both fixed income and equities, according to a report by Citi Private Bank.
The US Federal Reserve has delayed interest rate cuts beyond market expectations. Geopolitical uncertainty remains elevated. Nonetheless, family offices are still reducing cash holdings to add exposure to fixed income and equities in the second quarter, according to a report by Citi Private Bank.
On an equal-weighted basis, family offices globally have allocated 22.4 percent of assets to fixed income at the end of June 2024. Equities accounted for 35 percent of allocations with a preference towards developed large caps.
APAC Preferences
The Asia Pacific region reflected similar trends with cash allocations decreasing 0.6 percent to 27.2 percent. Fixed income and equity allocations increased 0.45 percent to 20.5 percent and 0.07 percent to 40.4 percent, respectively.
Developed investment grade and developed sovereign bonds were the largest contributors to overall positive net dollar flow within fixed income. Most buying activity centered on US Treasuries and high-quality financial credits with short to intermediate duration. Developed large caps were the main equity driver, primarily in US and select Japanese stocks.
Hedge Fund Demand
Within alternatives, hedge fund allocations rose 0.26 percent to 3.6 percent amongst APAC family offices. This was partly due to moderate buying interest in certain multi-strategy and multi-manager hedge fund strategies.
The «Citi Private Bank Family Office Investment Report» is an ongoing study of around 1,800 family office clients served by the bank and observations of their aggregate portfolio allocations as well as the latest moves each quarter.
