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THE GLOB AL F AMILY OFFICE REPORT 2017 7% 0.3%


THE AVERAGE PORTFOLIO RETURN IN 2016


262


THE AVERAGE PORTFOLIO RETURN IN 2015


FAMILY OFFICES TOOK PART IN GFOR 2017


PARTICIPANTS HAD ON AVERAGE


$921 MILLION AUM THERE ARE ABOUT 5,300 “


FAMILY OFFICES IN EXISTENCE GLOBALLY


Some of those who are


co-investing successfully told us they source their deals through personal networks or choose to co-invest alongside funds


family offices to prepare adequate succession plans—a point picked up in the mainstream media coverage of the research. Family offices are becoming more interested in


pursuing co-investment opportunities, though Dr Rebecca Gooch, director of research at Campden Wealth, says some are struggling to find suitable partners and found their in-house resources are tight when it come to doing due diligence on such deals. “Some of those who are co-investing successfully told


us they source their deals through personal networks or choose to co-invest alongside funds, for their due diligence capabilities,” Gooch says. Ferrari says family offices are becoming increasingly


sophisticated in their investment style. This showed through in a willingness to accept illiquidity and risk, particularly in North America where almost half (49%) of family offices are pursuing a growth-focused investment strategy, compared with 23% of European family offices. American family offices were rewarded when return performance (8%) outstripped that of other regions. Ferrari says as millennials become more involved in their family offices, they increase the trend towards


ISSUE 72 SUPPLEMENT | 2017


impact investing, with 40% of offices saying they plan to increase their allocation to this investment class over the next year. “This is an opportunity for family offices to use their


investment expertise to convert social objectives into financial concepts,” Ferrari says. “In doing so, they can help to shape the purpose of a


family and promote unity.” On average, offices surveyed gave $5.7 million to


philanthropic causes in the past 12 months, with 95% saying they would maintain or increase donations in the coming year. Staff remuneration outstripped returns, with chief


executives’ salaries growing close to 10% year-on-year, and chief operating officers getting an extra 10%. Women continued to be underrepresented at the C-suite level, and just 8% of family office chief executives were female. Another notable aspect of this year’s report was the


focus on succession, prompted by a 2016 finding that 69% of family offices expect to undergo a generational wealth transfer within the next 15 years. Researchers in 2017 found nearly half of family


offices (47%) in 2017 have a succession plan, either written (33%) or verbally agreed (15%). Another 30% said they were currently developing one and almost a sixth (16%) admitted they had no plans for generational transition at all. The succession challenge highlights how impressive


investment gains could mean little if succession problems block the road ahead.


CAMPDENFB.COM 5


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