Property and private equity remain relatively specialised asset
classes and we see families who understand these assets or who have
in-house expertise continuing to invest.
Many of our families are putting 10%-20% of their assets aside
for higher-risk deals where they feel that they can use their
assets to materially affect the wealth of the family. We are seeing
a few of our families enter into club private equity deals with one
another especially where they have done business before and
recognise their differing skill sets. Generally, however we are
seeing that our families want a significant (40%-70%) proportion of
their wealth in liquid assets, whether it be bank deposits or
It is notable that there is a growing focus on the fees that are
being charged by investment managers – again linked to the
lower relative returns being achieved and therefore the greater
proportion that fees were taking up. Families are looking much more
carefully not just at the annual management charges but at total
expenses as a percentage of net assets. There are opportunities in
both property and private equity if you know where to look. We are
not investment managers but we do get a lot of deals across our
desk – good, bad and ugly!
Overall, the sense we are getting from our clients and advisers
is that the London property market prices are likely to be flat in
2015 before continuing to rise steadily. There are other property
markets around the world though that still look like good value if
you know those markets well and have a long enough time horizon to
wait for liquidity to fully return to those more secondary
A minority of our clients actively track diversification and the
theoretical correlation between their different asset classes. More
important to them is that they have sufficient liquidity so that
they do not have to sell assets off at fire-sale prices and are
able to respond quickly to opportunities as and when market prices
Originally published in Family Office Global, Winter
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