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The European Family Office Report 2021

Deloitte Private is pleased to sponsor the European Family Office Report 2021, produced by Campden Wealth, providing an in-depth review of what’s trending with family offices across Europe and globally.

The picture of European family offices presented in this year’s report reveals nimble, dynamic organisations that have risen to some of the biggest challenges ever documented and largely thrived in 2020. Their long-term outlooks, agile decision-making and access to family capital enabled many to effectively navigate the financial markets, switch gears in the middle of the crisis and make bold bets on the future.

Outstanding governance issues are being addressed, greater emphasis is being given to preparing the next generation for their post succession roles and sustainable investing has been embraced by almost half of European family offices.

Capturing insights from over 100 family office leaders across Europe and almost 400 globally, this report is intended to be the most extensive study of family offices worldwide.

Scroll below for key findings from the report. Contact us if you have questions or would like more information.

Economic outlook

89% expect a continuation of economic recovery

European family offices are optimistic about the economic outlook for 2022, with 89% expecting a continuation of economic recovery. With this in mind, 56% of European family offices are seeking new investment opportunities, 43% are looking to diversify their portfolios and 35% are re-aligning their portfolios to pursue more growth-oriented opportunities.

Infrastructure

A third of family offices in Europe have two or more branches

Around one-third of family offices in Europe now have two or more branches. Furthermore, they are expanding their offices, structures and services. IT infrastructure, risk measures/structures, governance/reporting structures and staff levels are all key areas of growth over the last year.

Future investment trends

51% plan to allocate more to direct private equity investments

Appetite is growing for private and public equity deals. 51% of European family offices plan to allocate more to direct private equity investments, 43% to private equity funds, 24% to developed market equities and 22% to developing market equities.

Cryptocurrency

33% see cryptocurrency as a promising investment

Currently crypto assets account for just 1% of European family offices’ average portfolio. However, 28% of European family offices have a toehold in cryptocurrency in the expectation that it might become a mainstream asset class – with 17% planning to allocate more to this in 2022 and 33% seeing cryptocurrency as a promising investment.

Sustainable investment

45% of European family offices currently engage in sustainable investing

Sustainable investment is heating up rapidly and climate change is the number one target. Nearly half of European family offices surveyed currently engage in sustainable investing – with 29% of their average portfolio dedicated to sustainability. However, this figure is expected to rise considerably in the next five years. European family offices are gearing up to deploy their capital in eco-conscious businesses tackling critical social and environmental challenges, with the top sustainable investment theme being climate change.

Risk

54% report that risk management has become more important over the past year

Risk management has become more important to European family offices over the last year. Looking ahead, inflation and rising interest rates are perceived to be the most significant market risks over the coming 12 months, with investment risk and unpreparedness for succession being risks to family offices over the next three to five years.

Succession

A third of family offices will be taken over by the next gen in the next 10 years

We are in the midst of a major generational transition. 32% of European-based next gens have already assumed control of the family wealth, while another 34% will do so within the next 10 years. In terms of preparedness for this transition, just 52% of European family offices currently have a succession plan in place. Those deemed most prepared for succession are the family offices, followed by current serving family members and then the next generation.

Cyber security

38% claim to have experienced a cyber attack over the last 12 months

With the rise in remote working during the COVID-19 pandemic, cyber attacks involving targeted data breaches and malware attacks have become increasingly commonplace. 38% of the European family offices surveyed claim to have experienced a cyber attack over the last 12 months. However, less than one-third of family offices in Europe have a reportedly ‘robust’ cyber security plan in place. This suggests that more could be done to safeguard both family offices and the families themselves against cyber breaches that could have far reaching consequences.

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