A new study points to how multi- and single-family offices in the US and Europe think about the current extraordinary economic situation, long-term investment ideas and how people have adjusted their daily working arrangements.

A study of 15 family offices from the US and Europe finds that more than half of them (60 per cent) expect financial markets to be stronger in 12 months from now and only a minority (13.3) per cent think they will be unchanged. 

The study, conducted by familyofficehub.io, also found that 26.7 per cent of respondents expect a “slightly better situation” in financial markets versus where they are now. The report is another example of data showing how family offices’ fortunes have been affected. This publication, which is an exclusive media partner with data and research firm Highworth, has published detailed figures on how specific single family offices have been affected. (To register for the Highworth database, click here.)

Overall, 66.7 per cent of respondents expect the heaviest financial losses in financial markets, followed by 13.3 per cent who expect the heaviest losses in venture capital. The portfolios of the surveyed family offices performed better than most stock markets: 57.1 per cent of the participants experienced -10 per cent to zero losses from February 25 to March 16. Only 7.1 per cent reported losses between -30 per cent and -20 per cent. 

Most family offices are already exploring investment opportunities, such as distressed equity or bonds. Many family offices target tech stocks (for example Facebook, Apple, Netflix, Google) as well as food companies. Others are preparing private equity purchases, the study showed.

“Many of the most experienced asset and wealth managers work in the family office environment. The investment strategies of established family offices are a blueprint for many asset managers. For this reason, it is of great interest to all players in the investment industry how family officers react to the recent crisis,” the report said. 
 

Also, daily operations at the surveyed family offices are disturbed by COVID-19: 80 per cent of family offices in the study state that their daily work is impeded by the pandemic. Family offices changed to working from home to fight the COVID-19 spread: 46.7 per cent of family office teams are completely working from home, the remaining 53.3 per cent are working partly from a home office. Besides that, hygienic standards at the surveyed family offices have been increased, governmental guidelines are strictly followed, and additional internal company policies have been created.

“The current numbers demonstrate that many family offices are quite optimistic about the mid-term future. Hence, they are looking for investment opportunities that arise with COVID-19. Some family offices focus on the stock market and analyze a potential market oversell. Others have a deeper look at the private markets in order to identify real estate or private equity targets in a distressed situation,” the report said.

“Also, for the moment, most of the family offices go into cash and liquidate critical positions. As mentioned before, the family offices do not plan to completely change their investment style. Rather than going into new asset classes, they are actively looking for investment opportunities that were on their longlist before COVID-19,” it said. 

(Editor's note: the size of the survey is not large - 15 organizations - but may well be indicative, given the sheer size of such groups. We intend to produce more data with help from Highworth to track what is going on in much of the world's single family offices space, an area which, particularly in Europe, is not widely monitored as much as is the case in the US.)

For more on this news service's series on family offices, click here.