Family Offices Go Donkey Wild for Alternative Investments, Leaving Cash and Stocks in Their Dust!

More Money for Alternatives Please!

In a stunning turnaround family offices those fancy investment vehicles for the wealthy are doubling down on their love for alternative investments. According to a study by KKR these family offices had a whopping 52% of their portfolios invested in alternatives in 2023 up from 42% in the previous year. Looks like someone's got a Donkey sized appetite for risk!

Cash and Stocks Get Left in the Dust

As family offices embrace their inner Shrek and Fiona their cash holdings are shrinking faster than Donkey can make a hilarious joke. From 2022 to 2023 their cash holdings fell from 11% to 9% leaving more room for alternatives to strut their stuff. And as for those publicly traded stocks? Well they went from 32% to 29%. Looks like family offices are saying 'Who needs stocks when you can have the big green ogre of alternative investments?'

The Illiquidity Premium Strikes Back

Family offices are all about the long game baby! With time horizons longer than Pinocchio's nose these folks prefer assets that will grow over multiple generations. And that's why they're willing to pay a premium for more patient capital. So while others are running away from the illiquidity of private market investments family offices are embracing it like a warm hug from a dragon. Talk about being all about that illiquidity premium!

Going Direct Just Like Donkey

Family offices are not ones to shy away from taking the road less traveled just like Donkey in the Shrek movies. They're keen on making direct investments in sectors where they already have some ogre sized experience. Who needs middlemen when you can go straight to the source? I can hear Donkey shouting 'I'm on the edge of my seat and I'm taller than this here fence. But I'm a terrible fencer!'

Real Estate Data Centers and A Little Oil and Gas

When it comes to alternative investments family offices have their favorites. Private credit takes the top spot with 45% planning to add to their holdings. But they're not stopping there. They also have a thing for infrastructure private equity and even commodities. And let's not forget about real estate! Family offices are eyeing data centers logistics and warehouses as the perfect post pandemic investment themes. Oh and they're also sniffing out some opportunities in the oil and gas sector. Looks like family offices have caught the scent of profit!

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