UBS Global Family Office Report 2022: 221 Single Family Office Surveyed with $2.2 Billion Wealth Per Family Office

UBS Global Family Office Report 2022: 221 Single Family Office Surveyed with $2.2 Billion Wealth Per Family Office

10th June 2022 | Hong Kong

UBS has released the UBS Global Family Office Report 2022, surveying 221 single family offices with total wealth of $493 billion ($258 billion AUM), averaging $2.2 billion ($1.2 billion AUM) per family office.  Key findings from the 221 family offices include the average annual cost per family office is 0.42% of assets, identifying 3 major family office concerns (rising inflation, global geopolitics, valuation), and the top 3 tasks performed within the family office: Strategic asset allocation, Risk management, Financial accounting & reporting.  On investments, the highest asset allocation for family offices are equities (32%), developed market (24%), fixed income (15%), private equity (21%) and direct investments (13%).  53% of family offices have also increased their due diligence process when looking to invest, and 63% feels that high-quality fixed income no longer helps to diversify overall portfolio risk.  Of the 221 family offices surveyed, 42% (beneficial owners) are based in Europe, 10% are based in North America, 14% from Asia-Pacific, 16% from Middle East & Africa and 15% from Latin America.  85% of the family offices still have operating businesses, with the top sector representation from industrials (17%), financials (17%) and real estate (11%).  See below for key highlights.

“ 221 Single Family Office Surveyed with $2.2 Billion Wealth Per Family Office “

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2021 Data Release
2020 List of Private Banks in Hong Kong
2020 List of Private Banks in Singapore
2020 Top 10 Largest Family Office
2020 Top 10 Largest Multi-Family Offices
2020 Report: Hong Kong Private Banks & Asset Mgmt - $4.49 Trillion
2020 Report: Singapore Asset Mgmt - $3.48 Trillion AUM

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Key Highlights of UBS Global Family Office Report 2022

Key Highlights:

• Average annual cost per family office is 0.42% of assets
• 3 major family office concerns: rising inflation, global geopolitics, valuation
• Top 3 tasks performed within the family office: Strategic asset allocation, Risk management, Financial accounting & reporting
• Highest asset allocation for family offices are equities (32%), developed market (24%), fixed income (15%), private equity (21%) and direct investments (13%).
• 53% of family offices have also increased their due diligence process when looking to invest
• 63% feels that high-quality fixed income no longer helps to diversify overall portfolio risk.  

Of the 221 family offices surveyed:

• 42% (beneficial owners) are based in Europe
• 10% are based in North America, 14% from Asia-Pacific
• 16% from Middle East & Africa
• 15% from Latin America
• 85% of the family offices still have operating businesses, with the top sector representation from industrials (17%), financials (17%) and real estate (11%). 
• 221 single family offices with $493 billion wealth ($2.2 billion per family office)
• 221 single family offices with $258 billion assets ($1.2 billion per family office)

2021 Strategic Asset Allocation: 

• Equities: 32%
• Developed Markets: 24%
• Developing Markets: 8%
• Fixed Income: 15%
• Developed Markets: 4%
• Cash Equivalent: 10%

Alternative Asset Class Allocation: 

• Private Equity: 21%
• Direct Investments: 13%
• Funds / Funds of Funds: 8%
• Real Estate: 12%
• Hedge Funds: 4%
• Private Debt: 2%
• Gold / Precious Metals: 1%
• Commodities: 1%
• Art & Antiques: 1%
• Infrastructure 0%

3 Major Family Office Concerns:

• Rising inflation (25%)
• Global geopolitics (21%)
• Valuations (20%) 

Family Office Home Bias (Asset Allocation within region):

• United States: 75% (Allocated within region)
• Western Europe: 46%
• Asia-Pacific: 55% (Includes Greater China)
• MENA: 27%
• Latin America: 18%

Popular Investment Theme:

• Digital Transformation: 84%
• Medical Devices / Health Tech: 75%
• Automation & Robotics: 72%
• Green Tech: 69%
• Fintech: 68%

Views on Portfolio Construction:

• 63% ~ I no longer feel that high-quality fixed income helps me diversify my overall portfolio risk 
• 62% ~ Illiquidity increases returns
• 54% ~ I’m managing portfolio risk more actively now in comparison to previously 
• 37% ~ I’m willing to accept more risk in future in order to get the same returns 
• 33% ~ I’m no longer able to build a complete portfolio with long-only investments

Family Offices Stepping up Due Diligence:

• 53% ~ We have increased our due diligence process when looking to invest 
• 41% ~ We are actively allocating more to companies/sectors that are focused on directly impacting real world issues (e.g., lowering carbon emissions, renewable energy etc.) 
• 34% ~ We are actively allocating more to companies/sectors that can demonstrate strong ESG performance 
• 25% ~ We are actively engaging with management teams on sustainability/ESG in private equity deals 

Investing / Considering Investing in Digital Assets:

• Distributed ledger technology – 35%
• Cryptocurrencies – 26%
• Decentralized finance (DeFi) – 22%
• Digital exchanges – 20%
• Non-fungible tokens (NFTs) – 14%
• Digital assets (photos, videos) – 7%

Family Office Expenses (US / Western Europe / Switzerland / APAC):

• Staff Costs: 80% / 53% / 67% / 44%
• IT / Technology: 54% / 40% / 44% / 50%
• Research: 29% / 26% / 12% / 37%
• Legal &/or Compliance: 33% / 23% / 37% / 31%
• Asset management costs: NA
• Banking-related services fees: NA
• External structures: NA

Annual Cost of Family Office:

• Average: 0.42%
• $100 million to $250 million: 0.58%
• $251 million to $1 billion: 0.42%
• More than $1 billion: 0.31%

No. of staffs in Family Office:

• 1 – 3: 23%
• 4 – 10: 38%
• 11 – 20: 24%
• 21 – 50: 11%
• More than 50: 4%

Top 3 Tasks Performed in-House

• Strategic asset allocation 83%
• Risk management 78%
• Financial accounting and reporting 70%

More Tasks Performed in-House

• Portfolio administration 
• Accounting 
• Philanthropy 
• Succession planning 
• Real estate 
• Investment research 
• Lifestyle services 
• Corporate finance consulting 
• Tax planning 
• Legal services 
• Pension/life assurance planning