Results showed nearly half of respondents from major family offices expect under 5% total returns on their assets in the next year.
Citi Private Bank released results from a survey led by the Private Capital Group, providing a rare insight into the thinking of some of the world’s sophisticated family offices and investors during an unprecedented health and economic crisis.
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In one of the private banking industry’s most comprehensive polls* of investor sentiment since the onset of the COVID-19 pandemic, ultra-high net worth individuals and family offices flagged a mood of caution, cash conservation, and monitoring investment opportunities and risks created by the pandemic driving their thinking.
Nearly three-quarters of all respondents described their 12-month investment sentiment as “cautious”. Unsurprisingly, topping the list of concerns were COVID-19, both in terms of vaccine availability, as well as monetary and fiscal response by governments and central banks.
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Going into 2021, nearly half of those surveyed expected meager total portfolio returns in the next four quarters of 1% to 5%. When asked what portfolio changes they now plan to make, 56% reported making “some tactical changes,” while only 14% reported making “significant portfolio changes”.
A remarkable 59% of family offices reported having increased their allocations to direct investments for the next 12 months. In terms of direct sector investments by clients in a post-COVID world, respondents named information technology (24%), healthcare (16%) and real estate (15%) as their three top preferences.
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