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A version of this article appeared for the first time in Inside Wealth Newsletter of CNBC with Robert Frank, a weekly guide to the investor and consumer with high shuttle. Register To receive future editions, directly in your reception box.
Ultra-rich investment companies are increasingly investing in alternative assets such as real estate and venture capital, according to a new BlackRock survey. Family offices have an average of 42% portfolio allocation to alternatives in recent months, up 3 percentage points compared to last year, and make substantial changes to the way they invest this capital.
According to the survey, nearly a third (32%) of the unifamilial offices planned to increase their allowances to a private credit this year. The second most popular asset class was the infrastructure, with 30% of respondents reporting that they intended to invest more in the sector via debt or equity. The survey questioned 175 family offices supervising more than $ 320 billion combined between March 17 and May 19.
Private Equity always has a positive dynamic, although 12% of respondents said they were planning to reduce their allowances to funds or direct investments. Asked about the prospects of the asset class this year, 30% said they felt optimistic while 22% said their attitude was pessimistic.
Armando Senra of Blackrock told CNBC that the whole family offices are increasingly investing capital in investment. However, they distribute their bets with regard to private markets, hence the growing market share of private credit and infrastructure.
“The Private Equity continues to be a centerpiece of the portfolio,” said Senra, who directs the institutional activity of the asset manager in the Americas. “I think what you see is more the desire to diversify for several reasons.”
Liquidity is a key factor, he said, because the slowdown in outings means that investors in investment must wait longer for yields.
Senra also cited the low -risk attraction in infrastructure investment, which he said can provide “private capital efficiency with a significantly lower risk”. Three -quarters of respondents to the Blackrock survey said they feel optimistic or optimistic about infrastructure, with only 5% expressing pessimism.
The sector is also a way for family offices to invest in the boom of artificial intelligence.
“AI has the needs of large infrastructure,” said Senra, noting an increased demand for data centers and improved energy networks.
In May, Jeff Bezos’ family office supported a $ 155 million seed lap for the storage of Atlas data, a company that uses a DNA style system to store data more efficiently and at a lower cost.
As for private credit, some family offices are wary of media threshing. While 51% of respondents said they were optimistic or optimistic about a private credit, 21% said pessimistic or lowering attitudes. The private credit rush has raised concerns about the quality of borrowing companies and how many defects on loans in the event of recession.
Senra said prudence is natural when a asset class increases in popularity.
“I think that each time you have enough class that captures a lot of attention, you must really separate managers who have experience in different market environments,” he said.
That said, 62% of respondents favored the special debt of the situation, which is generally extended to companies that restructure or face stress. The second most preferred private debt category was direct loans. Well done, depending on the report, private credit can offer more investor protection than investment capital.