UBS Global Family Report 2020
22nd July 2020 | Hong Kong
UBS, one of the world’s largest wealth manager has released the UBS Global Family Office Report 2020. In the report, UBS surveyed principals and executives in 121 single family offices around the world with an average family wealth of $1.6 billion each in 35 markets. The total wealth of the 121 single family offices who participated in the report totalled $142.4 billion.
” 121 Single Family Offices averaging $1.6 billion each in UBS Global Family Office Report 2020 “
The report, analysed by UBS Evidence Lab reveals how family offices have been impacted by the market and economic disruption arising from the COVID-19 pandemic, their views on investments, private equity and sustainable investment.
View: Global Family Office Report 2020
Key Findings
- Asset Allocation: 56% of families are closely involved in strategic asset allocation
- Succession Planning: Around one third have no plans for change of control – Current generation beneficial owners are around 60s to 70s years old
- Sustainable Investing: 39% of family offices intend to do sustainable investing
- Impact Investing: 43% of family offices prioritise investment performance
- Private Equity: 69% of family offices view private equity as key driver of returns
- Adjustment in Crisis: 55% of family offices rebalanced their portfolios in March, April and May 2020 to maintain strategic asset allocation
Josef Stadler, Head of Global Family Office at UBS Global Wealth Management:
“Family offices have behaved differently to others during one of the most volatile periods in the history of financial markets. 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. 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. 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.”
Key Statistics
1. Family Offices – Strategic Asset Allocation
| Portfolio | Allocation |
| Traditional Asset Class (Equities, Fixed Income, Cash) | 59% |
| Alternatives (PE, Real Estate, Hedge Funds) | 35% |
| Gold & Precious Metals | 3% |
| Arts & Antiques | 3% |
Notes
- Traditional Asset Class: Equities, Fixed Income, Cash ~ 29%, 17%, 13%
- Alternatives: PE, Real Estate, Hedge Funds ~ 16%, 14%, 5%
2. Roles in Strategic Allocation
| Who is involved in the Strategic Allocation | |
| Beneficial Owner is the key driver | 28% |
| Beneficial Owner and Family Office are joint drivers | 28% |
| Family Office is the key driver | 24% |
| Mixed approach | 13% |
| Beneficial Owner and Family Office rely on Banking Partners | 7% |
3. Rebalance of Asset Allocation (in the last 2 – 3 months)
| Family Offices | |
| Rebalanced Portfolio | 55% |
| Did not rebalance Portfolio | 45% |
4. Family Offices’ Views on Private Equity
| Views on Private Equity | March | May |
| Expect private equity to deliver higher returns than public investments | 73% | 51% |
| Invest in in private equity for diversification | 52% | 48% |
| Offers broader range of potential investment opportunities | 48% | 32% |
| Private equity allow opportunity to influence the business directly | 27% | 35% |
5. Do they invest in Private Equity
| Invest in Private Equity | |
| Yes | 77% |
| No | 23% |
6. How they invest in Private Equity
| How they invest in private equity | |
| Funds | 31% |
| Direct Investments | 19% |
| Both funds and Direct Investments | 26% |
7. Preferred Private Equity Strategies:
| How they invest in private equity | |
| Expansion / Growth Equity | 71% |
| Venture Capital | 53% |
| Leveraged Buyouts | 40% |
| Distressed Buyouts | 26% |
8. Preferred Private Equity Sectors
| Preferred Private Equity Sectors | |
| Information Technology | 77% |
| Healthcare | 60% |
| Real Estate | 59% |
| Consumer Discretionary | 43% |
| Communication Services | 40% |
9. Sustainable Investment
- 66% – Performance evaluation is a big challenge
- 62% – Important for their legacy
- 43% – Top priority for the business owner’s family
- 42% – Climate change has already change some instrument selection
- 39% – To become majority of portfolio in 5 years’ time
- 32% – Have prepare family office’s team to make sustainable investments
- 28% – Active pipeline for direct impact investment opportunities
10. Sustainable Investing
- 57% – Happy with current approach
- 38% – Prefer to maximize returns and get involved in philanthropic initiatives instead
- 24% – Hard to measure impact / no long-term track record of performance
- 19% – Worried about having lower returns
- 19% – Don’t know enough about them / haven’t seen any success cases
- 10% – Few investment opportunities on areas or values they care about
- 10% – Do not believe in sustainable investing
11. Impact Investing Priorities
- 63% Education
- 50% Healthcare / healthtech / medtech
- 40% Climate change (e.g., clean air, carbon reduction)
- 30% Economic development /poverty alleviation
- 28% Waste management and recycling
- 25% Clean water and sanitation
- 25% Automation and robotics
- 20% Alternative food sources
- 20% Smart mobility
- 18% Agriculture
- 18% Security and safety
- 13% Fashion / Clothing
- 13% Animal Welfare
- 13% Gender Equality
12. Performance Indicators
| Performance Indicators | |
| ROI / IRR | 43% |
| Social Return on Investment | 22% |
| Environmental Impact | 12% |
| Performance on ESG indicators | 10% |
| Other | 13% |
Global Family Office Survey
UBS surveyed principals and executives in 121 single family offices around the world with an average family wealth of $1.6 billion each in 35 markets. The total wealth of the 121 single family offices who participated in the report totalled $142.4 billion. 87 of 121 family offices disclosed their net wealth.
- Total Wealth: $142.4 billion
- Average Wealth: $1.6 billion
Founding year of 121 Family Offices in the Report:
- 2010 or later – 38%
- 2000s – 31%
- 1990s – 14%
- 1980s – 7%
- 1970s – 3%
- 1960s – 2%
- 1950s or before – 5%
View: Global Family Office Report 2020
About UBS Global Family Office
Global Family Office (GFO) aims to anticipate and respond to the evolving needs of clients seeking the most complex solutions, ongoing institutional coverage, bespoke investments and financing, global coverage, and corporate solutions. In addition to global wealth management services, we offer billionaire families, wealthy entrepreneurs and their family offices access to the full range of UBS’s investment bank and asset management capabilities across geographies and booking centers.
Our clients are provided with holistic financial and non- financial advisory services, as well as an extensive peer network with dedicated teams in Zurich, Geneva, Lugano, London, Luxembourg, Munich, Frankfurt, Hamburg, Milan, Madrid, Singapore, Hong Kong, New York and Miami.
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