Preqin has released its 2023 Asia Pacific (APAC) Family Office Report, which explores how APAC family offices evaluate performance and how they plan to adjust their allocations, especially in the context of rising interest rates, high inflation, geopolitical risks, and a slowdown in economic growth.
The report shows that the key concerns for family offices are inflation (80 per cent), rising interest rates (70 per cent), and geopolitical risk (67 per cent).
Changes to capital allocation expectations show that almost three quarters (73 per cent) of family offices surveyed plan to maintain or increase their exposure to alternative investments in the next 12 months.
Meanwhile, 46 per cent of the family offices expect their private equity portfolio to perform worse in the next 12 months than in the previous 12. This is mainly due to valuation concerns resulting from the stock market decline, which 27 per cent of respondents cited as a market concern. For venture capital, a larger proportion (31 per cent) now plan to allocate less capital, rather than more (23 per cent), in the asset class over the next 12 months.
In terms of the adoption of ESG policy, 37 per cent of family offices have an ESG investment policy, while 43 per cent do not and do not intend to adopt one.
The report indicated pessimism in family offices with 63 per cent anticipating that their real estate portfolio will perform worse in the coming 12 months than in the previous year. However, Asia is expected to outstrip Europe by 2026 as a wealth hub, with a 33 per cent increase in the number of ultra-high-net-worth individuals (UHNWIs).
