The World's Wealthiest Families are Stockpiling Cash, UBS Reports
About 42% of family offices admit that they’re upping cash reserves, a recent UBS survey reveals.
“There’s more caution and fear of the public equity markets among ultra-high-net-worth investors,” said Timothy O’Hara, president of Rockefeller Global Family Office. “That has more people thinking about private investments, alternative investments or cash.”
Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said this month he thinks there’s a 75% chance of a US recession before the November 2020 presidential election, while the World Bank cut its 2019 global forecast to the slowest since the financial crisis a decade ago.
More than two thirds of European family offices surveyed by UBS, meanwhile, think Brexit will hurt the U.K. over the long-term.
The UBS/Campden report offers an insight into the discreet world of family offices, which manage the fortunes, tax affairs and even lifestyles of the wealthy.
Taxing the super-rich is increasingly becoming a topic of discussion in North America ahead of next year’s U.S. presidential election. Democratic candidates Elizabeth Warren and Bernie Sanders have proposed wealth taxes that may cost the nation’s richest billions of dollars.
Family offices have become a greater force in global financial markets. Campden estimates that such firms manage around $5.9 trillion. The offices in the UBS survey had an average of $917 million under management.
Investing results have been mixed for those responding to the questionnaire, which was conducted between February and March. Average family-office returns for the 12 months prior to taking the survey were 5.4%, according to UBS.
Developed-market equities were a big disappointment, providing an average 2.1% return. The highest average gains — 6.2% — were for family offices in the Asia-Pacific and emerging markets regions, followed by 5.9% in North America and 4.3% in Europe.
Check out a visual summary of these stats (broken down by region an asset class) below!
Source: Thinkadvisor.com, Bloomberg.