ESG and the long-term viability of business are becoming significant
Ocorian, a specialist global provider of services to high-net-worth individuals and family offices, financial institutions, asset managers, and corporates, has conducted new global research that reveals younger family members are playing a larger role in guiding the investment strategy of family offices.
“This is global research, and we realise the roles and the involvement of the next generation can differ depending on where the family is based. With our global team, these are cultural differences we’re sensitive to and can work effectively to deliver against,” Lynda O’Mahoney, Global Head of Business Development - Private Client at Ocorian, said.
Over 130 family office employees from across the world who are in charge of managing assets worth around $62.425 billion participated in the survey, and 87% of them reported that the next generation was more involved in the development and assessment of their family office's investment strategy.
The next generation is growing significantly more engaged, according to over a third (35%) of those polled. Only 1% of respondents claim that younger family members are less active in the investing strategy of the family office.
When making investments, younger family members prioritize the family office's long-term viability, while 84% would prefer to place greater emphasis on ESG factors.
Younger family members are becoming more interested in investing in private markets and digital assets—78% of them want the investment plan to incorporate private markets and 74% are considering digital assets, according to Ocorian's study.
Compared to the founders or previous generations, younger family members are more risk-averse, with 70% of them having a greater appetite for risk and 61% desiring a greater emphasis on philanthropy. With 34% anticipating a sharp rise and 61% projecting a little rise, family offices are becoming more inclined to invest in private enterprises in which the family previously has a stake.
“The influence of the next generation is being increasingly felt in family offices worldwide and they are bringing a different perspective to the investment strategies deployed,” O’Mahoney said.
“There is growing interest in ESG as well as private markets and digital assets but overwhelmingly younger family members want to ensure the long-term growth of the office. That underlines the growth in the family office sector is growing strongly as more family offices are established and increasingly more family members want to play an active role in managing their assets in the most efficient way,” she added.
