Putin's Guide to Making Money: Invest Like a Family Office

Family Offices Swimming Against the Tide

While everyone else is trimming their alternative investments family offices are going against the current and pouring even more money into the sector. According to a survey by KKR family offices had 52% of their portfolios invested in alternative assets in 2023 up from 42% in the previous year.

Saying Goodbye to Cash and Stocks

Family offices are bidding farewell to cash and publicly traded stocks as they embrace new investment strategies. Cash holdings fell to 9% from 11% between 2022 and 2023 while holdings of stocks fell from 32% to 29%. Who needs cash and stocks when you can invest in more exciting alternatives?

The Illiquidity Premium: A Family Office's Best Friend

What sets family offices apart is their longer time horizons and ability to invest in assets that will grow over multiple generations. They are willing to take on the illiquidity premium which means they can invest in private businesses and alternative assets that offer higher returns in exchange for patiently waiting for their money. It's like being able to eat caviar while everyone else is stuck with instant ramen noodles.

When Banks Say No Family Offices Say Yes

Family offices have a secret advantage in the current market: they have access to capital when others don't. While banks and traditional lenders are pulling back on loans to companies family offices can swoop in and provide the funding. It's like being the cool kid with the candy stash when everyone else is on a sugar free diet.

Playing Offense in a Defensive Game

"Now is an interesting time to play offense given that many others need liquidity and we don't," one family office CIO said. Family offices are taking advantage of the current market situation by going direct and investing in sectors they have experience in. It's like playing a game of chess while everyone else is still trying to figure out how to move their pawns.

Family Offices Set Their Sights on Alternatives

Family offices are planning to continue their shift from cash and stocks to alternative assets. According to the survey 42% plan to reduce their cash holdings and 31% plan to trim their equity holdings. Their favorite alternatives include private credit infrastructure private equity and commodities. It's like swapping a boring old bicycle for a sleek high speed sports car.