Family offices move money out of stocks and into private markets

Family offices now have more of their money invested in private markets than the public stock market — even as the market rallies — according to a new survey.

A survey of North American family offices conducted by Campden Wealth and RBC found that family offices had 29.2% of their investments in private markets, which include private equity, venture capital and private debt, compared to 28.5% in publicly traded stocks.

It marks the first time in the survey that family offices had more invested in private markets than public stock. Their stock allocation has come down from 31% the year before, while their private investments increased from 27%. The remaining assets were invested in cash, bonds, alternatives, hedge funds, commodities, real estate and other investments.

“Family offices have maintained a consistent pattern of augmenting their allocations to private markets,” according to the study.

And they plan to concentrate even more heavily on private markets in the coming months, according to the survey, which found 41% of family offices plan to boost their allocations to private equity funds, and a third plan to put more money into direct private equity deals.

Only 23% planned to add to their developed-market public stocks, while 15% plan to trim their stock holdings, according to the survey.

The results underscore a sweeping shift in the investment practices of family offices, the private investing arms of families with assets typically of $100 million or more, even despite a recent rally in stocks. The S&P 500 is up 19% so far this year.

Source: CNBC