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The
average "family office" portfolio returned just 0.3 percent in
2015, the UBS/Campden Wealth Global Family Office Report 2016
showed, down sharply from 6.1 percent in 2014 and 8.5 percent in
2013.
"Private equity and real estate once again outperformed most
other asset classes, and will have saved many family office
executives the indignity of delivering overall portfolio losses
to the beneficial owners in the last year," the report said.
"Both of these illiquid assets are core parts of
ultra-high-net-worth portfolios, and in the last few years have
ensured that the fortunes of the world's wealthiest have
comparably outperformed their less wealthy counterparts."
The average allocation to private equity was 21.6 percent, the
study showed, with a benchmark return of 5.9 percent, while the
average allocation to real estate was 9.2 percent, with a
benchmark return of 15.3 percent in Europe.
By contrast, more traditional asset classes fared less well,
with the benchmark return for developed market equities, to
which the average allocation was 19.4 percent, down 2.7 percent.
"There's an interest in more real-asset investments because
that's where you still find an acceptable yield," Oliver Muggli
of Swiss-based Mandorit, which advises on more than 1.5 billion
euros ($1.7 billion) in assets, told Reuters.
For the third year in a row, the returns from every asset class
failed to meet the expectation of those surveyed, with the
biggest disappointment coming from equity-linked assets, said
the report, which drew contributions from 242 family offices.
As a result, expectations for 2016 had been revised sharply
lower, with developed market equities expected to return 5
percent and developed market fixed income 2.6 percent.
($1 = 0.8896 euros)
(Reporting by Simon Jessop)
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