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Study Finds Increasing Interest in Alternatives Among Family Offices

Report finds that 42% of family office investment managers “strongly agree” that the industry is moving towards alternative investments and believe this to be a long-term shift, according to research from Ocorian, a financial consulting company.

The report comes from an international study with more than 130 family office investment managers responsible for around $62.425 billion assets under management.

According to the study, 77% of respondents reported growth of alternative allocations in funds, and 56% saw growth in special purpose vehicles and GPLP’s.

“As family offices look to diversify their portfolios and generate higher returns, there is a growing interest in alternative asset classes such as private equity, real estate and hedge funds,” Amy Collins, head of family office at Ocorian, said. “Whilst these asset classes offer the potential for higher returns, they also require a higher level of expertise and specialised knowledge.”

The study reports that alternative asset classes seeing the most benefit from the switch in allocations are likely to be real estate and private debt. A third, 34%, say their funds will increase allocations to real estate by 50% or more while 33% will make the same increase in allocations to private debt.

According to Ocorian, the strong performance of alternative assets is driving a long-term switch.

Examining the areas which see the most exposure to alternative investments, the EU was in the lead with (54%) respondents naming it. This was followed by the UK at 53%, with the Middle East and Asia and the Americas only selected by 38% and 32% of participants respectively.

Ocorian delivers administration and compliance services for funds, corporate, capital markets and private clients.

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