Citi Private Bank Finds Family Offices’ Priorities Transcend Preserving the Value of Financial Assets and include Fostering Family Unity and Continuity

(BUSINESS WIRE) -- Citi Private Bank’s Family Office Group today released the results of its 2022 Family Office Survey, capturing the thinking and behaviors of some of the most diverse family offices and ultra-high net worth investors globally. At a time of increasingly broad financial and geopolitical challenges, the report outlines areas of opportunities for potential growth in the year ahead.

Seven predominant themes emerged from the survey: 1) concerns go beyond financial assets, 2) portfolio values declined overall year to date, 3) outlook is positive despite the economic and geopolitical uncertainty, 4) direct investing remains a priority, 5) professionalization of the investment function in family offices continues, 6) readiness to manage family unity and continuity will be key for long-term success, and 7) allocations to sustainable and ESG investments have room to grow.

“Each of our family office clients has a unique need and perspective that helps inform how we can support progress towards their financial goals for generations to come,” says Ida Liu, Global Head of Citi Private Bank. “There is a growing awareness of the dual necessity to prepare wealth for families and families for wealth. And as a trusted partner, Citi Private Bank can help them do that.”

While the top three current economic concerns include inflation, fears of a recession and geopolitical uncertainty, family office executives expressed strong interest in preparing for the future. This includes preserving the value of the family’s assets and preparing the next generation to transition into leadership roles as responsible wealth owners. In fact, leadership successions at the family, family office or trustee levels are among the key transitions that a majority of respondents are expecting to face in the next five years.

“We are thrilled to share this year’s survey highlights, reflecting the urgent need for family offices to plan today for a successful future,” says Hannes Hofmann, the new Global Head of the Family Office Group at Citi Private Bank. “I look forward to working with some of the world’s most diverse and sophisticated family offices.”

Despite the concerns and perhaps a reflection of their sentiment that the market may have bottomed out, there is a high degree of optimism for portfolio returns over the next twelve months, with 80% of the family offices expecting portfolio gains and 62% expecting a 5% or higher increase in portfolio value. As far as asset allocation, public equity represents the lion’s share at 23%, but the attractiveness of real estate and private equity remains, representing 35% of asset allocations combined (20% and 15% respectively).

The 2022 Family Office Survey also found that direct investing remains a primary focus for family offices, with about a third of them allocating between 10% and 20% of their portfolio, while another third allocate more than 30%. Direct investments are split almost evenly between real estate (37%) and operating businesses (33%).

“We were excited to have doubled the number of questions this year to gain more valuable insight into the broad challenges family offices are facing and further understand where they want to go,” says Alexandre Monnier, Global Head of Family Office Services & Network. “In this survey we tried to capture where but also how family offices are investing, such as whether they rely on an investment committee or a board. This information helps further inform our clients on steps their peers are taking to address their needs and meet their goals.”

This year’s survey also showed that the opportunity to translate curiosity about sustainable or ESG investments into action remains significant, as 60% of family offices still have not considered aligning some of their portfolio with these themes or are unsure how they align. Co- or direct investment opportunities, private markets more broadly, and innovative strategies and partnerships demonstrate the greatest potential for ESG-related investments.

This year’s survey was initiated during Citi Private Bank’s seventh annual Family Office Leadership Program held in-person in June 2022 for the first time since the onset of the Covid-19 pandemic. The survey was subsequently released to Citi Private Bank’s global family office clients for input. The survey included over 30 questions aimed at gauging investment sentiment and portfolio actions of clients in the wake of macroeconomic headwinds and market volatility in early 2022. It drew responses from nearly 200 participants, of which 126 were completed and considered for this report.

About Citi Private Bank:
Citi Private Bank is dedicated to serving worldly and wealthy individuals and families, providing customized private banking across borders. With around $500 billion in total client business, the franchise serves clients across 50 cities in over 100 countries. Citi Private Bank helps clients grow and preserve wealth, finance assets, make cash work harder, safeguard assets, preserve legacies, and serve family and family business needs. The firm offers clients products and services covering capital markets, managed investments, portfolio management, trust and estate planning, investment finance, banking and aircraft finance, art advisory and finance, and sports finance.

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