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Citi Private Bank Finds Cautious Optimism Among Investors for 2022 with Covid-19, Inflation and Peak Market Valuations Top of Mind
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Rhea-AI Summary
The 2021 Family Office Survey from Citi Private Bank reveals that over 75% of family offices seek returns of 5% or more in the next 12 months, with 30% of those managing over $500 million aiming for over 10%. The survey, which saw an 11% increase in responses from last year, highlights concerns about rising inflation and a significant interest in direct investments. Notably, two-thirds of respondents maintain a positive outlook towards commodities. The survey was conducted in June 2021, with nearly 200 family offices participating.
Positive
Over 75% of respondents seek returns of 5% or more over the next 12 months.
30% of family offices with AUM over $500 million seek returns exceeding 10%.
Increased interest in direct investing reflects confidence in the economy.
Survey participation rose by 11% to nearly 200 responses.
Negative
None.
Majority of respondents in the annual Family Office Survey seek increased returns of 5% or more next year
NEW YORK--(BUSINESS WIRE)--
Citi Private Bank’s Private Capital Group today released the results of its 2021 Family Office Survey, compiling the unique perspectives and insights of many of the world’s sophisticated family offices and ultra-high net worth investors in a challenging climate. This year’s survey included nearly 200 responses, an 11% increase from 2020.
Four predominant themes emerged: 1) concern on rising inflation, 2) the prominence of high cash levels in the face of low yield environment, 3) continued growth in portfolio allocation to direct investing opportunities, and 4) a marked comeback in portfolio values year over year despite prevalent degree of macroeconomic uncertainty.
While over three-fourths of all respondents seek returns of 5% or more over the next 12 months, the outlook is more optimistic for family offices with AUM over $500 million with 30% seeking over 10% returns versus 19% of family offices with AUM under $500 million. This likely factors in the additional institutional tools and market access that family offices with higher AUM can leverage.
The 2021 Family Office Survey also recorded rising interest in direct investing in private enterprise and offers reaffirmation of many family offices increasingly buying directly into corporate capital structures. The survey shows that for almost half of the participants this kind of exposure represents 25% or more of their overall allocation.
“In these unusual times, our exclusive survey offers an invaluable glimpse of the thinking of family offices and other leading investors,” said Ida Liu, Global Head of Private Banking. “It’s reassuring to note that investor sentiment isn’t negative. Instead, family offices have weathered the COVID crisis well and are uniquely positioned to deploy further capital as they see opportunities arise. We stand ready to offer them our fullest support in the emerging post-pandemic landscape.”
“Among our many intriguing findings, it’s the rise of direct investing in private enterprise that reflects deep confidence in the flexibility and strength of the global economy,” said James Holder, Global Head of Citi Private Capital Group, Citi Private Bank. “It also underlines the vital role family offices and private capital play in supporting innovation, entrepreneurship, development of the stakeholder economy, creating jobs and new solutions to the challenges of our day.”
Also of note, the 2021 Family Office Survey found that two-thirds of respondents responded as ‘overweight’ or ‘neutral’ when it came to commodities in their portfolios, and there was also a continued shift in interest in emerging market equities.
This year’s survey was once again conducted during Citi Private Bank’s Sixth Annual Family Office Leadership Program held virtually in June 2021. The total number of survey respondents increased this year to 197 (versus 177 in 2020). Of those, 79% were family offices; an increase of 24% year-over-year.
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.
About Citi:
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi.
What were the key findings of Citi's 2021 Family Office Survey?
The survey highlighted that over 75% of family offices aim for returns of 5% or more, concerns about inflation, and a significant interest in direct investments.
When was the 2021 Family Office Survey conducted?
The survey was conducted in June 2021.
How many family offices participated in the 2021 Family Office Survey?
Nearly 200 family offices participated in the survey.
What percentage of family offices with AUM over $500 million aim for more than 10% returns?
30% of family offices with AUM over $500 million aim for returns exceeding 10%.
What themes emerged from Citi's 2021 Family Office Survey?
Key themes included concerns about rising inflation, high cash levels, increased direct investing, and a recovery in portfolio values.
