Inflation tops the list of near-term concerns for most family offices, with Asia being the exception, Recent market turmoil also offers opportunities.

Concerns over stubborn inflation, recession fears, and geopolitical uncertainty are the top economic concerns cited by family offices. Which concern is at the top, depends on what region you are in, according to the Family Office Survey Report 2022, from Citi.

For Europe, the Middle East, and Africa (EMEA), inflation was cited by 86 percent of the survey respondents. At the same time, it was also the top concern to a slightly lesser degree in North America (76%) and Latin America (75%), and only 64 percent in Asia.

In Asia, the top concern was geopolitical uncertainty, with 86 percent of respondents citing that, whereas it was lowest in EMEA at 43 percent, according to the survey. The concerns also were somewhat different depending on the level of assets under management.

Assets Under Management

Concerns over recession and market volatility were bigger concerns for family offices with assets under management of less than $1 billion, with 76 percent of family offices citing that as their top concerns compared to 50 percent for those with over a billion. Social unrest and geopolitical uncertainty are slightly higher concerns for family offices with AUM in excess of $1 billion.

Recession and Rate Concerns

Interestingly, interest rate increase concerns were highest in EMEA at 64 percent whereas, at the same time, recession fears were lowest at 43 percent. In North America, the opposite was true where recession concerns were highest at 58 percent among the four regions and interest rates at 44 percent. 

The report covered 126 family office respondents, of which 71 percent had $250 million or more in assets under management and 30 percent had over $1 billion.

Opportunities in Turmoil

Citi said that family office CIOs who gave presentations an annual event in Washington, DC generally viewed current market disruptions and turmoil «as a potential opportunity to build resilient portfolios by focusing on high-quality investments while maintaining their strategic long-term vision», Citi said. 

While not a family office, ARK Investment Management did just that, buying shares in nearly 30 companies among its eight exchange-traded funds, as first reported by «Bloomberg» (behind paywall).