Citi Survey: 60% of Family Offices Have Own CIO
A majority of family offices (60%) globally have a CIO in place to oversee investments, according to Citi Private Bank’s fifth annual survey, released Tuesday. The “2024 Family Office Survey” highlighted the thinking of family offices around the world, based on its June survey of 338 participants.
Overall, those surveyed had a positive outlook on investment performance in the near future, according to the survey, as 97% of surveyed funds expected positive returns over the next 12-month period.
Citi noted that, for the first time since 2021, inflation was not among the top concerns of participants. Instead, the interest rate outlook was the top-of-mind concern for more than 50% of participants, followed by U.S.-China relations and asset valuations.
“While family offices are innately unique, our survey demonstrates that there are many commonalities around their concerns and behaviors,” said Alexandre Monnier, Citi’s family office advisory global head, in a statement. “Findings like these unveil the new ways family offices are managing their wealth—through portfolio diversification and sophisticated investment approaches—and preparing families to achieve both financial and family wellbeing.”
The Role of the CIO
Citi’s survey revealed that approximately 60% of surveyed family offices had a CIO-led investment team, with investment committees and policy statements. A third of participants reported not having an in-house CIO, and 10% of funds said they used an outsourced CIO.
Larger family offices were more likely to maintain an investment team led by an internal CIO, with smaller funds more likely to outsource. The Citi report noted that attracting and maintaining a full-time CIO was a significant commitment and an expensive one more affordable to a larger fund.
Only 49% of family offices with assets under management of less than $500 million had an internal investment team (and 39% did not have a CIO), while 70% of funds with AUM of greater than $500 million had such a team (and 22% did not have a CIO).
Family offices in the Asia-Pacific region were most likely to use an OCIO approach, at 16%. Offices in the Middle East and Africa were the least likely to go OCIO, at only 3%.
CIOs were more likely to be found at funds on at least their third generation since a family’s wealth was created. On average, 73% of these funds had a CIO, 16% had no CIO and 11% used an outsourced CIO. First- and second-generation firms were less likely to have an internal team and less likely to have a CIO.
Asset Allocation
Overall, this year nearly half of family offices increased their allocations to fixed income (49%), followed by public equity (43%), private equity (42%), real estate (31%) and cash (31%). Approximately 38% of family offices made no change to their fixed-income allocations, followed by public equity (40%), private equity (46%), real estate (55%) and cash (33%).
Roughly 13% of family offices decreased their allocations to fixed income. These funds put cash to work in 2024, while 37% of family offices reduced their allocation to cash. About 12% of funds reduced their allocation to private equity, with 14% reducing their allocation to real estate.
Family offices were most bullish on private equity direct investing (47%), private equity funds and funds of funds (41%) and global developed equities (39%). At the same time, these funds reported a neutral expectation for art (69%), commodities (64%) and cash, emerging fixed income, and global developed corporate high-yield fixed income (each 62%).
Family offices were most bearish regarding digital assets (28%), followed by hedge funds and emerging market fixed income (25%) and emerging market equities (20%).
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