Real estate has found its latest partner in family offices, attracted to deal in the real estate market because of its returns as well as "diversification benefits." These investments are now worth 17 percent, accounting for a big percentage of family office investments.
The Investor reported family offices having upgraded their real estate exposure, citing plans to increase real estate investments. It is evident in the Campden Wealth and UBS 2018 Global Family Reoirt that family office investments are directed towards real estate, in an effort to be more involved in real estate investments that are substantially more beneficial.
Family offices have a lot more reasons to associate itself with real estate, but there are more positives that may govern its choices. Chief among these are the diversification of portfolios including stocks and bonds. Another reason why family offices are looking more and more to real estate is its performance, with 2017 being a banner year for global real estate.
Those aren't the only reasons behind family offices' preference for investments in the real estate, but they wouldn't be able to do investments without funding in the first place. The funding is revealed by Global Family Office Group USB AG head Sara Ferrari as cited by Opalesque. She explained that family offices invested on the back of a strong performance financially. Now was the best time as any to invest because of the bull market.
The USB AG head also cited that Asia lent a strong influence on the performance of these markets, benefiting from exposure to different equities, namely those from developing markets as well as a number of private deals from the region. The family offices from Asia has also become institutionalized, not to mention extremely sophisticated, as time passed by.
Family offices have also become increasingly professionalized, according to Campden Wealth director of Research Dr. Rebecca Gooch. Since having a breakout portfolio performance, family offices have managed to branch out, increase their AUM annually, and have massive profits-at least, the families owning the offices have experienced increased wealth over a string of strong performances.
With these trends, it's safe to see that in the future, family offices will be a steady player in the world real estate market. The market needs investors, and family offices are just another one of a string of new players that will revitalize the market again.
