Appetite for Risk Among Family Offices Expected to Increase

Heightened regulation of riskier assets is a key reason family offices feel better about taking on risk, while allocations to infrastructure are also expected to increase, per a survey from Ocorian.

Improved regulation of assets such as alternatives has given family offices more confidence in taking on riskier investment plays, per new research from U.K.-based financial services company Ocorian.

According to Ocorian’s survey of family offices, approximately 82% of family office professionals think their firm’s appetite for investment risk will increase, including 12% who said it will dramatically increase.

Of those who said investment risk appetite will increase, approximately 62% noted that increased regulation of ‘riskier assets’ is the main reason for that heightened risk tolerance.

Family office investors also reported an increase in allocations to alternative investments. Survey respondents unanimously (99%) said that increasing investments to alternative asset classes from family offices is a long-term trend.

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“The long-term trend of family offices increasing their exposure to alternative asset classes is certainly a factor in the growing appetite for risk and it is clear that improvements in regulation around riskier assets is proving popular with family offices,” said Annerien Hurter, global head of private client at Ocorian, in a statement.

Two areas in which some family offices expect the highest allocation increases are infrastructure and private debt, with 26% of survey respondents estimating that allocations to infrastructure could increase by 50%, while 23% of respondents predicted allocations to private debt could increase the same amount.

Other survey findings include:

55% of family office respondents reported inflation has peaked or will soon peak;

More than half of those surveyed (51%) said that family offices in the Middle East will see the highest increase in exposure to alternatives; and

Approximately 47% of respondents who expect an increase in investment risk appetite also expect increased transparency around alternative investments.

“Regulation is playing an increasingly critical role in shaping the investment strategies of family offices,” said Mark Spiers, a partner in Ocorian consultancy Bovill Newgate, in a statement. “Improvements in the regulatory landscape, particularly around riskier assets, are enabling family offices to explore new opportunities while still ensuring robust governance frameworks.”

Ocorian and research firm Pure Profile surveyed more than 300 family offices with a combined $155 billion in assets under management in July 2024.

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Tags: Alternatives, Annerien Hurter, Family Offices, Mark Spiers, Ocorian, PureProfile, Risk

Northern Trust is looking to hire a head of its outsourced CIO business, according to a company job posting on its site and on LinkedIn. The firm’s OCIO business has $111.9 billion assets under management, as of the end of June.

The head will be expected to lead the OCIO team and develop and implement strategic and business plans, as well as collaborate with Northern Trust’s global CIO. The successful candidate will also manage the operational aspects of the OCIO business, which includes compliance, risk management and technology integration. The OCIO head is a new role designed to “strengthen and grow” the business, according to a spokesperson.

The position, a hybrid role based in Chicago, also involves overseeing client relationships and working with the sales and marketing team to develop and implement OCIO business development strategies. The new OCIO head will also work with client investment officers to set investment guidelines toward designing investment management agreements.
The head of OCIO will work closely with the CIO of asset allocation to determine asset allocation strategies to maximize investment performance for client portfolios.

Qualifications for the job include a bachelor’s degree in finance, business, economics or a related field, although those with an MBA or a CFA designation are preferred. The candidates must also have at least 15 years of experience in investment management, particularly concerning OCIO services or in similar roles.

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