INSUBCONTINENT EXCLUSIVE:
Head of Stone Family Office said he doubts the bond market will provide any real return.Rick Stone, a former partner at Cadwalader,
Wickersham - Taft, sees treacherous times ahead for family offices trying to deploy cash.The head of Stone Family Office said he doubts the
bond market will provide any real return over the next decade, that equity markets will suffer a substantial drop and then be flat, and that
too much venture capital and private equity money will continue to chase too few opportunities."It's a very hard time for family offices
to allocate money," said Stone, 60, whose initial wealth came from class-action litigation fees.Stone has a good vantage point on the
action, since he runs the bi-monthly meetings of the Palm Beach Investment Research Group, a network of 35 family offices in Palm Beach,
"The areas to invest in are fewer, and there is a lot of money looking for those spaces," he said.That view of the markets is shared by many
of the 360 global single- and multi-family offices surveyed for the 2019 UBS Global Family Office Report, which was done in conjunction with
Campden Research and released Monday
A majority expect the global economy to enter a recession by 2020, with the highest percentage of gloomy respondents in emerging markets
About 42 per cent of family offices around the world are raising cash reserves."There's more caution and fear of the public equity markets
among ultra-high-net-worth investors," said Timothy O'Hara, president of Rockefeller Global Family Office
"That has more people thinking about private investments, alternative investments or cash."Jeffrey Gundlach, chief investment officer of
DoubleLine Capital, said this month he thinks there's a 75 per cent chance of a U.S recession before the November 2020 presidential
election, while the World Bank cut its 2019 global forecast to the slowest since the financial crisis a decade ago
More than two thirds of European family offices surveyed by UBS, meanwhile, think Brexit will hurt the U.K
over the long-term.The UBS/Campden report offers an insight into the discreet world of family offices, which manage the fortunes, tax
affairs and even lifestyles of the wealthy
Taxing the super-rich is increasingly becoming a topic of discussion in North America ahead of next year's United States presidential
Democratic candidates Elizabeth Warren and Bernie Sanders have proposed wealth taxes that may cost the nation's richest billions of
dollars.Family offices have become a greater force in global financial markets
Campden estimates that such firms manage around $5.9 trillion
The offices in the UBS survey had an average of $917 million under management.Investing results have been mixed for those responding to the
questionnaire, which was conducted between February and March
Average family-office returns for the 12 months prior to taking the survey were 5.4 per cent, according to UBS
Developed-market equities were a big disappointment, providing an average 2.1 per cent return
The highest average gains -- 6.2 per cent -- were for family offices in the Asia-Pacific and emerging markets regions, followed by 5.9 per
cent in North America and 4.3 per cent in Europe.Private equity was the star asset class, with an average return of 16 per cent for direct
investments and 11 per cent for funds-based investing
Real estate also performed well, returning an average 9.4 per cent, and now makes up 17 per cent of the average family-office portfolio, up
2.1 percentage points from last year's survey
In the year ahead, 46 per cent of families said they plan to put more money in direct private equity investments, with 42 per cent devoting
more to private equity funds and 34 per cent funneling more into real estate, according to the survey.Family offices are also increasingly
focused on a different kind of potential disruption: succession planning
This year, 54 per cent of those surveyed said they have a succession plan in place, up from 43 per cent last year."We didn't really see the
community addressing this issue in the way that it needed to" in previous years, Campden Wealth research director Rebecca Gooch said
"As the saying goes, 'Wealth can be made and lost in three generations.' "(This story has not been edited by TheIndianSubcontinent staff and
is auto-generated from a syndicated feed.)Get Breaking news, live coverage, and Latest News from India and around the world on
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