Family office investors prefer private equity to hedge funds as per a survey conducted by advisory firm Somerset Capital, Financial News has reported.
The survey was conducted among 51 family offices and it found that 46% respondents planned to increase their allocations to private equity, compared to just 14% who were looking to invest more in hedge funds.
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Private equity made up an average allocation of 23% among the surveyed firms and more than a third, 37%, family offices said they would not be changing this, while just 6% were looking to decrease their allocations.
Among the key areas of interest was mid-market buyouts, which was highlighted by 59% of respondents, and growth equity, which was listed by 67%. Large buyouts were the least popular investment area, with 15% preferring such deals.
Hedge fund investments stood at an average of 6% of overall allocations. More than two-thirds, 71%, family offices said they did not plan to change this.
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By GlobalDataGlobally, family offices had an average of 24.5% of their assets under management committed to the asset class as of June 2012 – nearly double that of endowment plans, which were ranked as the second most active private equity investors, according to data provider Preqin.
In December, research by UBS and Campden Wealth found wealthy European families that turned to cash and real estate to avoid volatility in the securities markets had seen their returns drop to five-year lows.
The poor performance was partly the result of attempts to diversify portfolios away from bonds and equities, as per the report.
