Family offices look to raise allocations to non-US, developed markets equities: BlackRock survey
[SINGAPORE] Family offices are raising their portfolio allocations for non-US developed market equities as tariff tensions and concerns about a US economic slowdown are prompting many to diversify, a BlackRock survey has found.
This comes as US shares have had a volatile year marked by the Trump administration's on-and-off tariff shifts, with the S&P 500 underperforming indices in Europe and Asia. In the year to date, the S&P 500 has inched up only 2.6 per cent compared to other global markets: Europe's Stoxx 600 rose 8.3 per cent, Hong Kong's Hang Seng Index jumped 19.9 per cent, and South Korea's Kospi has soared about 22 per cent.
With an upheaval in global markets set off by 'Liberation Day' tariffs and the possibility of the US economy slowing down, family offices are rethinking their investment portfolios, which tend to have significant exposure to US equities, bonds, and the greenback.
Up to 64 per cent of family offices are looking to increase portfolio diversification and 84 per cent see the challenging geopolitical landscape as an increasingly critical factor that weighs on their investment decisions, leading to a reassessment of how they generate returns and manage risks.
With the drive towards diversification, 59 per cent seek to raise their allocations to non-US developed market equities, said the report, which surveyed 175 single-family offices that collectively oversee assets worth more than US$300 billion.
Many family offices are also looking to private markets for diversification and higher returns, the report added.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Alternative assets, which make up 42 per cent of family office portfolios, appear set to remain a portfolio cornerstone, despite rising concerns about fees.
The appetite for infrastructure investments is also growing, with 75 per cent of survey respondents positive on the asset class' prospects.
Liquid and illiquid alternatives, cash, and crypto, are also set to be beneficiaries from family offices' push for diversification and downside mitigation.
Private credit becomes core allocation
Sentiment on private credit is bullish as close to a third or 32 per cent of family offices plan to raise allocations to the asset class between 2025 to 2026 – the highest figures among alternative asset classes covered by the survey.
It is becoming a core allocation in portfolio of many family offices and occupies 15 to 30 per cent of total AUM for the portfolios of some respondents, the report said.
'The asset class has attracted fresh capital and allocations previously earmarked for public debt, private equity, and venture capital,' it said.
When it comes to selecting particular strategies within private credit, respondents prefer special situations and direct lending – as both categories are viewed as offering equity-like returns with superior structural protection.
While some see opportunities in potential volatility some respondents are worried about crowding in the private credit space or the performance of the asset class in a recession during a credit downcycle.
Infrastructure: resilient, hedge against inflation .
Favoured for its perceived resilience and inflation mitigation abilities, 'infrastructure's role as a portfolio diversifier that can provide inflation-linked yield is a compelling combination for family offices', the report said.
Infrastructure's ability to generate stable cash flows and its alignment with long-term secular growth themes, such as the energy transition and digital connectivity, make it appealing
Sentiment on infrastructure is bullish as three in ten family offices plan to raise allocations to infrastructure investments between 2025 and 2026.
This makes the asset class the second most popular of all alternative assets surveyed, a runner-up to private credit's 32 per cent.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
34 minutes ago
- Straits Times
Immigration raids in Los Angeles hit small business owners: ‘It's worse than Covid'
A third of California's workers are immigrants and 40 per cent of its entrepreneurs are foreign-born. PHOTO: REUTERS LOS ANGELES - Mr Juan Ibarra stands outside his fruit and vegetable outlet in Los Angeles' vast fresh produce market, the place in the city centre where Hispanic restauranteurs, street vendors and taco truck operators buy supplies every day.. On the morning of June 16 , the usually bustling market was largely empty. Since Immigration and Customs Enforcement (ICE) officials began conducting immigration raids more than a week ago, including at a textile factory two blocks away, Mr Ibarra said business has virtually dried up. His street vendor customers are at home in hiding, while restaurant workers are too scared to travel to the market to pick up supplies. Most of the market's 300 workers who are in the US illegally have stopped showing up. Mr Ibarra, who pays US$8,500 (S$10,900) a month in rent for his outlet, which sells grapes, pineapples, melons, peaches, tomatoes and corn, usually takes in about US$2,000 on a normal day. Now, it's US$300, if he's lucky. Shortly before he spoke to Reuters, he had for the first time since the ICE raids began been forced to throw out rotten fruit. He has to pay a garbage company US$70 a pallet to do that. 'It's pretty much a ghost town,' Mr Ibarra said. 'It's almost Covid-like. People are scared. We can only last so long like this – a couple of months maybe.' Mr Ibarra, 32, who was born in the US to Mexican parents and is a US citizen, is not alone in seeing President Donald Trump's crackdown on immigrants in the country illegally devastate his small business. It is happening across Los Angeles and California, other business owners and experts say, and threatens to significantly damage the local economy. A third of California's workers are immigrants and 40 per cent of its entrepreneurs are foreign-born, according to the American Immigration Council. The Trump administration, concerned about the economic impacts of his mass deportation policy, shifted its focus in recent days, telling ICE to pause raids on farms, restaurants and hotels. The ICE raids triggered protests in Los Angeles, which prompted Mr Trump to send National Guard troops and US Marines into the city, against the wishes of California's Democratic Governor Gavin Newsom. Ms Abigail Jackson, a White House spokeswoman, said violent protesters in Los Angeles had created an unsafe environment for local businesses. 'It's the Democrat riots – not enforcement of federal immigration law – that is hurting small businesses,' Ms Jackson told Reuters. Restaurant slump The recent shift in focus by Mr Trump and ICE has been no help for Mr Pedro Jimenez, 62, who has run and owned a Mexican restaurant in a largely working class, Hispanic neighborhood in Los Angeles for 24 years. Many in his community are so scared of ICE they are staying home and have stopped frequenting his restaurant. Mr Jimenez, who crossed into the US illegally but received citizenship in 1987 after former Republican President Ronald Reagan signed legislation granting amnesty to many immigrants without legal status, said he is taking in US$7,000 a week less than he was two weeks ago. O n June 13 and 14, he closed at 5pm, rather than 9pm, because his restaurant was empty. 'This is really hurting everybody's business,' he said. 'It's terrible. It's worse than Covid.' Mr Andrew Selee, president of the non-partisan Migration Policy Institute, said the Trump administration began its immigration crackdown by focusing on people with criminal convictions. But that has shifted to workplace raids in the past two weeks, he said. 'They are targeting the hard working immigrants who are most integrated in American society,' Mr Selee said. 'The more immigration enforcement is indiscriminate and broad, rather than targeted, the more it disrupts the American economy in very real ways.' Across Los Angeles, immigrants described hunkering down, some even skipping work, to avoid immigration enforcement. Mr Luis, 45, a Guatemalan hot dog vendor who asked to be identified only by his first name for fear of being targeted by ICE, said he showed up this weekend at the Santa Fe Springs swap meet – a flea market and music event. He was told by others that ICE officers had just been there. He and other vendors without legal immigration status quickly left, he said. 'This has all been psychologically exhausting,' he said. 'I have to work to survive, but the rest of the time, I stay inside.' REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
38 minutes ago
- Business Times
Airbus strikes deal for up to 150 planes with VietJet
[PARIS] Airbus struck a deal on Tuesday (Jun 17) to sell up to 150 single-aisle aircraft to Vietnamese budget airline VietJet, as the European planemaker continues to rack up business at the Paris Airshow. The companies said they had signed a memorandum of understanding for VietJet to buy 100 more A321neo planes, with the option to add up to a further 50 to the deal in future. The agreement confirmed an earlier Reuters story. A deal for 150 A321neos could be worth around US$9.4 billion, according to estimated prices provided by Cirium Ascend. 'These modern and efficient aircraft have been instrumental in VietJet's growth,' VietJet chairwoman Nguyen Thi Phuong Thao said in a statement released at a press conference attended by a delegation including several Western bankers. 'This landmark agreement represents a vital step in VietJet's growth strategy as a multi-national aviation group.' The planes will be delivered from 2030 onwards, and VietJet said it had financing in place for the deal. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up European planemaker Airbus has announced a flurry of deals at the Paris Airshow, the world's biggest aviation trade fair that opened on Monday. US rival Boeing is expected to have a more subdued show as it focuses on the probe into last week's fatal crash of an Air India Boeing 787 and after it racked up huge deals during US President Donald Trump's recent tour of the Middle East. VietJet, the largest private airline in Vietnam, operates an all-Airbus fleet, apart from two Chinese-made regional jets. The airline has not to date taken delivery of any of the around 200 MAX planes it has ordered from Boeing. Airbus is the main supplier of jets to Vietnam, accounting for 86 per cent of the planes currently operated by Vietnamese airlines. However, the export-dependent country is under pressure from Washington to buy more US goods. VietJet's latest deal comes only weeks after it ordered 20 A330neo wide-body airliners from Airbus. REUTERS
Singapore Law Watch
40 minutes ago
- Singapore Law Watch
Goh Jin Hian judgment clarifies scope of directors' duties, notes observers as ruling says directors should be a ‘sentinel', not a ‘sleuth'
Goh Jin Hian judgment clarifies scope of directors' duties, notes observers as ruling says directors should be a 'sentinel', not a 'sleuth' Source: Business Times Article Date: 17 Jun 2025 Author: Ranamita Chakraborty Observers say judgment offers practical guidance by narrowing the scope of when a director should be held liable for inaction. Former Inter-Pacific Petroleum (IPP) non-executive director Goh Jin Hian's recent win in his appeal in the Appellate Division of the High Court has given 'welcome relief' to other company directors with its clarification of the scope of directors' duties. The Appellate Division in a judgment on Jun 5 overturned a previous ruling requiring Goh to pay damages of US$156 million to the insolvent marine fuel supplier after IPP's liquidators had accused him of 'sleepwalking through his time as a director'. 'Welcome relief' Adrian Chan, first vice-chair at the Singapore Institute of Directors (SID) and head of corporate at Lee & Lee, said the successful appeal was a 'welcome relief' as it clarifies the boundaries of a director's responsibilities and what qualifies as actionable 'red flags'. The judgment, he added, offers practical guidance by narrowing the scope of when a director should be held liable for inaction. Had the lower court's judgment stood, Chan believes directors could face liability even when unaware of fraud committed by peers or when financial reports show no warning signs. Kelvin Law, associate professor of accounting at Nanyang Technological University's Nanyang Business School, said that the case demonstrated that correlation does not equal causation – a mere link is insufficient. He said: 'This case is a powerful reminder that a link isn't enough as a plaintiff must prove that the director's specific failure was the direct cause of the financial loss. To obtain damages, (the) plaintiff has to show that there's a causal relationship between negligence and damage.' Boey Swee Siang, partner at law firm RPC, pointed out that while Goh's failure to be aware of the cargo trading business constituted a breach of his duty of care, the court clarified that the 'red flags' identified by the company's liquidators were insufficient to trigger an inquiry into its financials. In Goh's case, he was only required to satisfy himself within reasonable limits regarding the company's financial position. 'The non-executive director is not required to make exhaustive inquiries into individual transactions or events, so long as these transactions or events were not, on their face, of such a nature as would raise immediate concerns,' added Boey. Yee Chia Hsing, an independent director at several Singapore Exchange-listed companies, agreed with the judgment, saying directors cannot be expected to be better than auditors and there is a right to presume no fraud unless clear warning signs exist. 'If (there is a) need to presume fraud, a lot of resources and effort would be wasted across the entire system as directors would need to be commissioning forensic investigations from auditors on a regular basis specifically to detect fraud,' he told BT. The court ruled that although Goh breached his duty of care by failing to stay informed about IPP's cargo trading operations, this breach was not due to ignoring red flags within the company. 'Get their hands dirty' Still, SID's Chan emphasised that directors, including non-executive ones, have a duty to guide and monitor management, going beyond mere compliance. He said: 'They have to ask tough questions, roll up their sleeves and get their hands dirty. Rather than playing the role of a mere sentinel, sleuth, investigator or watchdog... a director should more appropriately look upon himself or herself as an active steward – sometimes being called upon to play all these roles and more, as the circumstances and director duties demand it.' The judgment's reference to '(a) director may be a sentinel, but he is not a forensics investigator or a sleuth' resonated with Chan, who stressed that directors cannot simply stand watch passively. 'There really is no such thing as a 'sleeping director' as a director's duty to act in the best interest of the company is an active one that doesn't ever go to sleep,' he added. RPC's Boey believes this decision serves as a reminder to independent directors of listed companies that 'they do owe a duty of care to their companies, but also sets the standard of care to a reasonable one'. Directors and officers liability insurance Beyond training, Nanyang Business School's Prof Law highlighted the importance of having directors and officers liability insurance. 'It provides the financial resources to defend themselves – which, as this case shows, can be a long and expensive process even if they are ultimately successful,' he added. Chan also advised directors to read 'the fine print, exclusions, coverage, territory, and ensure that the scope and size of the sum assured is appropriate for the size of the business'. He pointed to several high-profile cases involving non-executive directors under investigation or charged for failing to disclose material, price-sensitive information – including Hyflux, Eagle Hospitality Trust, Raffles Education and Cordlife. 'The outcomes of these cases will bring further clarity to the role of directors on listed boards, and will help shape corporate governance in Singapore,' he added. Source: The Business Times © SPH Media Limited. Permission required for reproduction. Print
