The third annual Simple Family Office & Private Wealth trend review explores the ten most influential trends in the private wealth space. These are some the key takeaways for 2021:
1. From 2020 onwards, everything is a political
statement
Corporations that ignore global movements like Black Lives Matter
do so at their own risk. Investee business need to be
cognisant of current societal conversations and move from reactive
compliance to proactive commitment.
2. Cause-washing becomes the new
green-washing
Just claiming to be 'eco-friendly' doesn't wash any
more; consumers want their brands to support a cause, and
businesses know it.
3. Distrust of technology and the tech-giants continues
to grow
Cyber-security is increasingly important to family offices.
4. Privacy becomes the new "gold" in the face
of data breaches
In a world of invasive 'KYC', data breaches, and
digitisation, private investors value privacy now more than
ever.
5. Investment in tech surges as the world goes
digital
Business models of the future that do not embrace technology will
be left behind.
6. The rise of locality changes the real-estate
game
Real estate investment is no longer just a strategic asset class -
property investors are looking at how to 'build back
better' in a post-pandemic world. Co-working space is a prime
example.
7. Activism becomes mainstream through ESG and impact
investing
Investee business are incentivised not just by competitive gains
but also reputational ones.
8. More dramatic changes to asset-class definitions and
allocations
Family offices are shifting allocations to alternative asset
classes. Some leading asset managers are even starting to recommend that investors include a
small allocation of their portfolio to cryptocurrencies.
9. Cultural values are leveraged to drive behavioral
change
Family businesses that invest globally need to be
culturally-sensitive.
10. The rise of political geographies
The rise of modern trade wars and the Covid pandemic has taught us
that globalisation is fragile. Geopolitical borders are still a
reality and private investors need to be aware that, for example,
investing in China is not the same as investing in the US.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.