Goldman Sachs study: Family offices are increasingly turning to cryptocurrencies

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Forex in this article

• Investment in alternative asset classes, long investment horizon
• Percentage of future planned crypto investments clearly declining
• Belief in blockchain technology as the primary reason for investing

The second Family Office Investment Insights Report from Goldman Sachs takes place against a completely different macroeconomic background than the first study in 2021. Nevertheless, according to the authors, a comparison of the two surveys has shown that the companies surveyed are sticking to their strategic orientation and kept their asset allocations largely constant. Respondents were companies, 70 percent of which have more than $1 billion in net assets under management.

How do family offices invest?

Family offices have an average total portfolio allocation of 44 percent to alternative asset classes. The investment horizon extends over several generations, so residential real estate and collector’s items remain interesting. “Family offices continue to make significant investments in alternative assets such as private equity, private credit, infrastructure, real estate and hedge funds,” said One Goldman Sachs Family Office Initiative co-lead Tony Pasquariello in the report.

Meena Flynn, also co-lead of the One Goldman Sachs Family Office Initiative, adds: “With the flexibility to invest across the risk spectrum, family offices have maintained a broadly consistent approach to more aggressive allocations as they seek above-average returns.” Family offices also seem to be showing increasing interest in personal loans, as the banks are leaving a gap here and these are becoming more attractive as interest rates rise.

Bitcoin and Co.: Investments in digital assets have increased significantly

Digital assets have become significantly more popular with family offices: 26 percent of the companies surveyed stated that they were already invested in Bitcoin, Ethereum and Co. This is a significant increase from the previous survey, when around 15 percent said they owned digital assets.

Belief in blockchain technology is cited as the top reason for engaging in the crypto universe (19 percent). Eight percent of those surveyed are convinced of cyber currencies as a store of value. The diversification of the portfolio (9 percent) and speculative intentions (8 percent) also play a role.

But the question of future investments is interesting. Here the optimism towards digital assets seems to be curbed: only twelve percent of those surveyed who are not already invested in crypto see future investment potential in digital assets. In comparison, two years ago, 45 percent of respondents in the Goldman Sachs survey expressed an interest in digital assets to hedge their portfolio against macroeconomic developments such as rising inflation or low interest rates.

The reason given for the significantly reduced interest in future investments is the extreme volatility of the crypto market. Almost two thirds of those surveyed stated that they were not planning any future investments in this market segment.

Other surveys, such as those by the commercial law firm Dentons, published earlier this year, paint a similar picture: blockchain technology as a “new enabling technology” remains the main motivation for family office investments in the crypto space.

Editorial office finanzen.net

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