The role of the next generation in family offices has risen substantially, according to a new report by Family Capital, which also shows how much impact investing is driving their priorities.
Entitled Family Offices and Investment – The Generation Shift, the new report was produced in association with Jersey Finance, and it surveyed 50 family offices across the US, Europe, Asia, and the Middle East. A PDF copy of the report is available here.
The survey was created to assess how the Covid-19 Pandemic had accelerated the influence and the thinking of the NextGen wealth owners at family offices and how that might affect their investment priorities.
Among the findings were:
“Doing good” has become mainstream
In the past, wealth owners tended to park their “doing good” efforts with their foundations and thought of them as philanthropic. Of course, this will continue, but the emphasis on “doing good” in all investment decision-making has now become central to the portfolio constructions of an increasing number of family offices, as the survey shows. This tends to be more apparent where the NextGen control the investment groups, compared with the NextGen taking over existing structures. :
Biotech and healthcare drive investment decisions
When it comes to “doing good”, family offices showed greater interest in investments in the biotech and healthcare space, compared to portfolios with an emphasis on environmental protection or social justice goals. This was potentially a direct result of the greater importance on healthcare and vaccine development due to the Pandemic, rather than necessarily a long-term trend.
The Next Gen is pushing for better governance structures
Internal governance and how that is communicated have become a bigger priority for family offices and there are likely to be greater formalisation of structures and governance processes in the coming years.