Family offices raise stakes in private equity – UBS

Private equity now accounts for a fifth of family office portfolio allocations, up from 16% three years ago, with a significant minority of the offices planning to increase that in the coming years, according to a survey by UBS.

For the 220 families that, on an average, manage USD 2.2bn, equities still take up the biggest share of their portfolios. However, high inflation, central bank liquidity, and rising interest rates are now pushing them to explore private markets.

"In response to the COVID-19 pandemic, digital disruption, and now a war in Ukraine, they are reviewing their options with greater urgency, as a strategic shift towards additional sources of return and alternative diversifiers gains ground," said Joe Stadler, executive vice-chairman at UBS Global Wealth Management.

Just a fifth of the families have no investments in private equity and it is the only asset class — alongside equities, real estate, and private debt — that is seeing more investment year-on-year, said the report.

American billionaires are most likely to be private equity investors, followed closely by Swiss. Even in Western Europe and Latin America, where private equity investment lags, participation is high with nearly three-quarters of families taking positions.

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