From February to May 2018 UBS and Campden Wealth surveyed 311 family offices, each with an average of $808m in assets under management. 38% of them were located in Europe, including Luxembourg, Monaco, Russia and the UK.
“Interestingly, it can also be revealed that the older family offices that participated in this research, which originated before the 1970s, hold a third more AUM on average than those founded after this period, USD $992 million versus $632 million,” Dominic Samuelson, CEO of Campden Wealth, wrote in the report (PDF download).
The industry overall made more money for its clients in 2017. “Having returned seven percent in 2016, and just 0.3 percent in 2015, the average portfolio delivered returns of 15.5 percent last year,” the bank stated in its media announcement.
The increase was partly due to rising stock prices and partly due to a shift towards better performing alternative funds. UBS said:
“28 percent of the total average family office portfolio is now comprised of equities. Improved performance can also be attributed to strength within the private equity space, which comprises over a fifth (22 percent) of the average portfolio and has delivered returns of 18 percent in 2017.”
The report also found that:
“[N]early half (46 percent) of the average family office portfolio is now allocated to alternative investments.”
One third of family offices said they planned “to increase their allocations to developing market equities, private equity funds and real estate direct investments” over the next year.
At the same time, according to the report, 38% of family offices had made sustainable investments, such clean energy or using “ESG” screens, and 45% “reported that they plan to increase their sustainable investments over the next 12 months”.
32% were “involved in” impact investing, which deliver an environmental or social benefit alongside a financial return. “Over half, 54%, of respondents, also reported that they plan to increase their allocation to impact investing over the next 12 months.”
On average. family offices said they planned to spend $11.4m this year:
“$6.7 million in operational costs, and $4.7 million in external investment management performance and administration fees.”
Family offices located in North America had the lowest total costs, while those in Asia-Pacific had the highest, with Europe in the middle.
CEOs of family offices had an average base salary of $333,000 in 2018 (up 11% from 2017). There were notable regional differences:
“From a regional perspective, CEOs in Europe made the highest total average salary, USD $469,000. North American-based CEOs followed at $414,000, Asia-Pacific at $389,000 and Emerging Markets at $312,000”.
About one third of family offices (32%) said they had experienced a cyber-attack.