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Family Offices – advisors of wealthy families are rich with clients News

Saturday, September 16th, 2017 | Economy

According to a report by UBS and Campden Wealth, the C-suite payment at so-called family offices – companies that take care of the assets of the super-rich – has risen significantly. The average basic salary for a managing director thus increased by almost 10 percent compared to 2017,000 this year. Investment managers were up 8% to $ 314,000.
The income from family offices recovered last year. In 2016, they averaged an average of seven percent, compared to just 0.3 percent a year earlier, as the report published this week shows. It was particularly good for family offices in North America, which were less heavily invested in real estate than their counterparts in other parts of the world.
"The recovery can largely be attributed to two factors: better stock market performance and improved returns due to allocation shifts," said Stewart Kesmodel, head of UBS's global family office for America. As investors had reduced the debt of fixed-income and hedge funds, "these dollars have flowed into private equity, operating companies and cash-flow-producing assets such as real estate."
High bonuses paid out
Including bonus payments that can be below half the total remuneration, the average pay of a managing director of a North American family office rose to 631,000 dollars. This is the highest sum when looking at geographic regions. Managing directors of European family offices earned 497,000 dollars.
As in a large part of the investment world, the top paid managers are mostly male. Only 7.7 percent of family office CEOs and 13.2 percent of CIOs were female. Women appeared more frequently than Chief Operations Officers and Chief Financial Officers.
Business become more complex
Traditionally, family offices were focused on accounting and tax planning for rich families. However, the complexity of the companies has increased. In some cases, they even begin to resemble small hedge funds or investment banks.
Against this backdrop, they have recruited talents from Wall Street. The family offices used challenges in other areas of investment management to create a staff of employees in their own company. "The family offices, which look beyond the preservation of the capital, have become more aggressive in their strategy, as are the talents they set for implementation," said Kesmodel.
The income of the family offices has risen as families take risks by directing funds towards private equity and private equity. This year, 27.1% of family allocations and private equity investments account for around 20.3% of portfolios, according to the study of this week.
Hedge funds less in demand
At the same time, the family offices, like other institutional investors, are moving further away from hedge funds. Behind this is dissatisfaction over high fees and weak development. Hedge fund allocations have declined by an average of 7.1 percent in 2017 compared to 8 percent in 2016, despite improved performance.
In addition, family offices look for opportunities in emerging market markets. The survey showed that 44 per cent of respondents are planning to invest more money into emerging market equities. Only 21 percent want to increase their exposure to industrial shares. The study of UBS / Campden is based on 262 families with an average fortune of 921 million dollars in February and May. Of the respondents, 68 percent look after the assets of a single family.


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