Family offices expect to increase acquisitions and investments in 2024, new research suggests.
The anticipated spending spree will be driven by a number of factors, including the growing belief that company valuations are becoming more realistic, according to data from Ocorian, which provides fund administration, capital markets, corporate and fiduciary services.
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Almost all of the family office professionals surveyed (94 per cent) say they expect to increase acquisitions and investments this year compared to 2023, with 18 per cent reporting they’re planning for a ‘dramatic’ increase.
Which asset classes will benefit? Investment grade credit is likely to see the biggest rise, with more than half (52 per cent) of respondents planning to ‘dramatically’ increase allocations. Real estate funds, infrastructure funds and non-investment grade credit are also tipped to be among the big winners.
A desire to increase levels of direct investing (49 per cent); greater liquidity (21 per cent); and a need to diversify (9 per cent) are all driving factors in the strategic shift.
Around 62 per cent of family offices say they will expand acquisition plans as company valuations are becoming more realistic and attractive, while 60 per cent say the rising cost of debt is forcing more companies to look for investors.
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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, 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. Some principals served by family offices – namely those who are younger or of a younger mindset – are focused on exploring private equity and direct investment opportunities.
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‘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.’
