Appetite for Risk Among Family Offices Expected to Increase
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.
“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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