In America, the transformation in work environments and economic backdrop has given rise to new investment trends among ultra-high-net-worth families.
A recent report by Goldman Sachs, titled “Eyes on the Horizon,” examines the investment preferences of over 165 family offices worldwide, shedding light on how they are navigating the current financial landscape.
American family offices maintaining steady investment strategies
Despite the challenges posed by macroeconomic and geopolitical changes, family offices have maintained a stable approach to investment.
The Goldman Sachs report reveals that they continue to allocate capital towards risk assets, with 48% of family offices planning to increase their public equities allocation along with other private asset classes.
At the same time, 35% of family offices intend to make opportunistic investments over the next 12 months, leveraging their cash balances that have generated higher yields.
These institutional investors have shown a preference for sectors like information technology and healthcare, which often spearhead innovation and disruptive technologies.
Moreover, family offices have increasingly solidified their stance on cryptocurrencies. The report indicates that 62% of family offices are “not invested and not interested in investing,” up from 39% in 2021.
Digital asset investments experience a decline
Although interest in digital asset investments surged among home offices in 2022, the following year witnessed a significant downturn in investor confidence in the digital assets market.
According to the “Eyes on the Horizon” report, 32% of family offices currently hold investments in digital assets, including cryptocurrencies, non-fungible tokens (NFTs), decentralized finance (DeFi), and blockchain-focused funds.
Among the reasons cited for investing in digital assets, 19% of family offices believe in the potential of blockchain technology, while only 8% and 9% mention speculation and portfolio diversification, respectively.
The proportion of family offices invested in cryptocurrencies has risen from 16% in 2021 to 26% in 2023. However, interest in potential crypto investments has plummeted this year, with only 12% of investors indicating interest, down from 45% in 2021.
A diverse survey of home offices
The report is based on a survey conducted between January and February 2023. Questionnaires were sent via email to family offices, with 166 participating in the survey. Of these, 95 are based in the Americas, 34 in Europe and the Middle East, and 37 in the Asia Pacific.
Goldman Sachs emerged as one of the top performers during the recent banking crisis, attracting investors who sought to reallocate their portfolio investments.
The bank’s money funds received $52 billion, marking a 13% growth and the largest monthly volume of inflows since the onset of the COVID-19 pandemic.
As America’s work environments evolve and the economic landscape shifts, family offices continue to adapt their investment strategies. While interest in digital asset investments has waned in 2023, family offices remain committed to sectors that drive innovation and offer the potential for long-term growth.
