The bank said that family offices' cash holdings are, on average, above all of its own positions and for every bracket of risk.
Family offices globally put more cash to work in the third
quarter of 2023, according to a regular snapshot from Citi Private
Bank, although the US bank said their cash position was above
its own strategic asset allocation for every risk level.
In its Family Office Investment Report, the bank said that for the second quarter running, allocations rose on both a capital- and equal-weighted basis. Inflows into high quality investment grade and sovereign debt were the driver. Within sovereign debt, inflows focused on three to five-year maturities.
“Amid weak financial market conditions in the third quarter, family offices in every region bar Asia Pacific put more of their cash to work on average,” the authors of the report said.
The bank said that family offices showed more interest in fixed maturity portfolios as they sought to lock in higher rates. On the other hand, family offices retreated from global high yield fixed income and global emerging market fixed income. On the equities side, globally, equities' allocations stood at 33.6 per cent. Europe, the Middle East and Africa, and North America saw increases, whereas in Latin America and Asia-Pacific there were decreases.
Source: Citi Private Bank
In the regions experiencing positive inflows to equities, activity focused on developed large-cap equity, the bank said.
Despite mixed flow trends, equities remain the largest single asset class within family office portfolios in every region. Asia-Pacific had the highest allocation at 38.2 per cent, while EMEA was the lowest at 29.1 per cent, on an equal-weighted basis.
Allocations to private equity, real estate and hedge funds stood at 6.4 per cent, 3.6 per cent and 2.8 per cent respectively. On average, family offices had only 0.9 per cent of all holdings in commodities.