Latest news with #UBSGlobalFamilyOfficeReport
NZ Herald
08-06-2025
- Business
- NZ Herald
Wealthy families invest heavily in private equity, UBS report finds
THE FACTS The 2025 UBS Global Family Office Report offers some fascinating insights into how the world's wealthiest families think about risk, time and opportunity. UBS captured the views of 317 family office clients. The average net worth of participating families was US$2.7 billion, with their family office teams managing
NBC News
22-05-2025
- Business
- NBC News
Family offices bet on the U.S. and stocks for 2025, UBS finds
Despite growing fears of a ' sell America ' trade, American family offices are ramping up their bets on the U.S. economy and stocks, according to a new survey. U.S. family offices, the private investment arms of wealthy families, had 86% of their portfolios in North America in the first quarter, up from 74% in 2020, according to the UBS Global Family Office Report. In the survey of 317 global family offices, no other region or country reported such a high home bias. UBS conducted the survey from Jan. 22 to April 4, meaning it ended two days after President Donald Trump 's tariff announcement upended global markets. While the stock market has rebounded, investors are still cautious about U.S. assets as trade war negotiations and America's ballooning debt loom large. However, domestic family offices have not bought the 'sell America' narrative, John Mathews of UBS told CNBC. The U.S. market's history of outperformance is just one factor, he said. 'U.S. family offices are staying home,' said Mathews, who heads the bank's private wealth unit in the Americas. 'In times of uncertainty, you invest in things you understand, you invest in regions of the world that you know and you invest in companies and technologies that you know. I think that's what we're seeing a little bit right now.' The participating families reported an average net worth of $2.7 billion, with their family offices managing $1.1 billion each. Time will tell how family offices overseas shift their allocations in the long term, Mathews said. With the exception of European firms, international respondents allocated the lion's share of their assets to North America, peaking at 64% for Latin American family offices. Only 12% of respondents said they planned to decrease investments in North America over the next five years. Nearly a third (32%) planned to increase their allocation to North America. The most popular region for increasing investment was Asia-Pacific at 35%. Mathews credited interest in the region, which excludes Greater China, in part to India's emerging tech scene. Global family offices increased their allocation to developed market equities (mainly the U.S.) from 24% to 26% last year. They plan to double down in 2025, raising the allocation to 29%. American family offices are even more bullish on stocks, planning to ramp up their developed and emerging market exposure from 28% to 32% this year. The report said family offices see stocks and large public companies as an effective way of investing in their key themes, which include artificial intelligence, power and energy generation and health-care advances. Family offices, Mathews said, are 'leaning a little bit more into the public markets, public equities and fixed income.' 'I think it's simply just the opportunity to have access to maybe a quicker opportunity with the volatility in the market,' he added. 'You know, the U.S. has the deepest, most conservative markets in the world.' As they're moving into public markets, family offices are stepping back from private equity, at least for now. After years of raising their allocations, peaking at 22% in 2023, family offices trimmed their private equity allocation by 1% last year and plan to cut another 3% this year to reach 18%. U.S. family offices intend to make an even more significant drawdown in private equity, paring back their 35% allocation in both direct and funds investments by 8%. Nonetheless, Mathews noted that family offices still have plenty of skin in the game when it comes to private equity. Further, according to the survey, family offices appear positioned to unwind some of these cuts in the future. Over the next five years, more than a third of firms expect to increase their direct private equity (37%). And a similar number are interested in investing in funds or in funds of funds (34%). 'So many of our family offices have a large exposure to private equity and private deals. They're waiting for those exits, and they've been delayed,' he said. 'I think they're just being more selective, but when they see the right one, they typically go all in.' U.S. family offices plan to make another substantial adjustment to their portfolios, raising their real estate allocations by 8% to 18% while overseas participants only intend to add 1% for a tally of 11%. In the long term, family offices have a mixed outlook, with 29% intending to increase their allocation over the next five years while 19% plan to decrease. This discrepancy can be attributed to how families made their fortune and where they are located, Mathews said. 'If you're a real estate-focused family office, you may be looking at this as an opportunity to scale back. If you're not a real estate-focused family office, you're probably looking at this as an opportunity to look to buy home debt,' he said. 'Family offices are looking at properties and real estate investments and see big opportunities, especially if there's further declines in those properties.'
NBC News
03-04-2025
- Business
- NBC News
Family offices are moving money out of the U.S. on tariff, economic fears
At his Singapore-based family office, Srihari Kumar has long favored U.S. investments. The former Goldman Sachs managing director, who also co-founded TPG-Axon Capital, takes a truly global view of investing. The portfolio at his family office, LionRock Capital, has traditionally been about 40% in the U.S., 40% in India and 20% in the rest of the world. In the past six months, however, that has shifted. LionRock's investments in the rest of the world (outside the U.S. and India) have expanded to over 25%, largely at the expense of the U.S. And it may shift more in the future, Kumar said. 'The combination of tariffs and reduction in government-related spending (through DOGE and research spending etc.) causes greater economic uncertainty and a greater risk that economic growth will falter without a corresponding reduction in interest rates,' Kumar said. He stressed that he's still bullish on the U.S. over the long term, especially when it comes to artificial intelligence and technology. But he said that given high U.S. stock valuations, the market concentration in the Mag 7 stocks and new opportunities abroad, he is 'taking a pause' on adding to the U.S. LionRock is not alone. Even before President Donald Trump 's bombshell tariff announcement Wednesday afternoon, family offices are rethinking their investments in the U.S. Policy uncertainty, volatile stocks and declining outlooks for economic growth have driven many family offices to seek safety and geographic hedges. Some are putting money into hard assets, like gold or real estate. Others are raising cash and waiting for the dust to settle. After years of favoring U.S. 'exceptionalism,' experts said family offices are now rethinking their global allocations, lowering their U.S. exposure and looking to take advantage of new opportunities overseas. Whether it's investing in Europe on the strength of renewed defense spending, or betting on China's advancements in AI and robotics, family offices are at the forefront of a rapid shift to more global diversification. According to the UBS Global Family Office Report, family offices had half of their assets invested in North America in 2024. Europe ranked a distant second, with 27% of assets, followed by Asia-Pacific and China. North American family offices were the least diversified, with 82% of their assets invested in North America. Yet even overseas family offices put a lot of money in the U.S., with family offices in Asia and the Middle East investing 49% of their assets in North America. The big question in the financial industry is whether the family office move out of the U.S. will be brief and limited, or whether it's the start of a broader structural trend. The world's 8,000 single family offices have over $3 trillion in assets under management, expected to grow to $5 trillion by 2030, according to Deloitte Private. Family offices have become a critical source of capital for startups, private equity, venture capital, real estate and other businesses in the U.S. If family offices start moving more capital abroad and divest from the country, the drop in funding could be felt across the financial system. For now, the moves are relatively small. Family offices invest for the long term, with time horizons of 20 or even 100 years, so they don't make big changes based on headlines and market swings. 'We're not seeing a wholesale shift out of the U.S.,' said Richard Weintraub, the family office group head of the Americas at Citi Private Bank. 'But they're kind of rediscovering opportunities in Europe and Asia. I think it's probably more tactical in nature. For this to be a continued strategic shift, you'd have to see the fundamentals back it up over a longer period.' Non-U.S. investors seem to be making the biggest moves. Between Feb. 14 and March 14, European investors pulled over $3.079 billion from U.S. equity ETFs and added nearly $16 billion to European equity ETFs, according to Morningstar Data. Kumar said the repatriation of capital from the U.S. by foreign investors 'could cause an increase in the cost of capital for U.S. markets, with higher rates and lower valuation multiples.' That could also lead to higher debt payment costs and deficits, which are also a concern for foreign investors. William Sinclair, head of the financial institutions group and the U.S. family office practice at J.P. Morgan Private Bank, said strong returns in Europe and other global stock markets in 2025 have only highlighted the need for family offices to be truly diversified across countries. 'Due to elevated policy uncertainty, there is a growing emphasis on diversification as a defense against market volatility,' he said. 'This includes a shift to non-U.S. stocks, core fixed income, and gold, all of which have delivered solid returns and helped shield diversified portfolios.' He added that, 'Overall, we have seen a modest shift in capital allocation outside the U.S. by Single-Family Offices, primarily as a strategy for broader diversification.'
