According to global financial reports, released in September 2016, wealthy investors are contributing huge sums of money to private equity in order to avoid any risk related to potential stock market downturn. Family Offices, which are typically private wealth management advisory firms that provide an outsourced finance and investment solution to affluent individuals or families, are now reportedly investing an average of 22% of their portfolio’s in private equity, this figure may not seem all that high – however its up from 15% in 2015.
Our view, which is echoed by many others, is that wealthy investors, like Family Offices, are drawn to private equity not just to avoid risk related to market downturn but also due to this sector’s strong returns over recent years.
Another drawcard to investing in private equity is you can have the opportunity to get to know the particular development or business you’re investing in – there’s more intimacy than the stock market. This particular element suits Family Offices as as they are much more likely to invest in an opportunity that they believe in. Vice chairman of Global Family Office Group (UBS Switzerland), Philip Higson, commented, “Strong performance from private equity over the last five years has only served to strengthen this natural affiliation.”
While Family Offices and other wealthy investors are trimming their exposure in other markets, they are investing more and more in private equity. As reported by Campden Wealth, “Family Offices plan to continue beefing up their private equity holdings and reducing their exposure elsewhere.”
If you qualify as a sophisticated or wholesale investor and would like to know more about the private equity opportunities offered by AUS Finance Group, contact Chris Broad on 0407 096 237 or cbroad@ausfinancegroup.com.au.
For more information regarding sophisticated/wholesale investors visit the ASIC Website .
Lauren Said, Manager – Marketing and Communications.
Learn more about Lauren.
Disclaimer: This article has been prepared without taking into account your objectives, financial situation or needs and should be regarded as general advice only. Before acting on this advice you should consider whether it is appropriate for your needs and has regard for your own objectives and financial situation. We encourage you to consult a finance professional before acting on any advice provided in this article or found on this website.