Family offices are set to increase acquisitions and investments in the year ahead, driven by a growing belief that company valuations are becoming more realistic.
Research from fund administrator Ocorian found investment-grade credit to be the asset class most in demand, but alternatives and global equities are also popular.
Some 301 senior executives internationally were surveyed at firms with annual turnover of more than $250 million.
Almost all (94%) of family office professionals questioned expected to increase the number of acquisitions and investments this year compared to 2023.
Around 18% expected to dramatically increase acquisitions and investments while 6% expected to deliver the same level of acquisitions and investments.
Some 62% cited company valuations, which were viewed as becoming more realistic and attractive, as a reason and 60% noted that the rising cost of debt was forcing more companies to look for investors
However, part of the rise in acquisitions is down to a strategic shift, said Ocorian. Nearly half (49%) questioned said they wanted to increase levels of direct investing while 21% said they were cash rich and 9% admitted they needed to diversify.
Investment-grade credit was most popular with more than half (52%) of the respondents, and real estate funds and infrastructure funds scored joint second (at 34%) among those who said they would increase exposures dramatically.
For those looking to increase slightly, global equities (64%) and private credit (60%) topped the list.
Amy Collins, head of family office at Ocorian, said: “The family office sector is growing rapidly and going through a series of tactical and more structural changes – as the study shows – with family offices set to go on a buying spree in the year ahead.
“With interest rates having been so low for so long, the increases have created a new way to look at certain asset classes.”
She said that principals served by family offices, whether they be younger or simply of a different generational mindset, are more focused on exploring private equity and direct investment opportunities, and that data showed a trend developing for investing in alternatives.
“Many family offices had largely held back from the markets and wider investment during the pandemic and its aftermath before changing course during 2023 and increasing investments across a range of sectors and particularly the alternative fund sector.
“It’s great to see that the family office professionals we questioned foresee much more activity in 2024 and the positive outlook they’re suggesting, but we do wonder whether this will be the case of if it will buffer into 2025 and beyond.”
