“Loud and Clear”, the recently released 2023 Family Capital Survey published by KRR, was based on a proprietary survey of more than 75 Chief Investment Officers (CIOs) who oversee over three billion dollars in assets.
The report has several interesting insights that stood out regarding investment allocations and strategy:
Key Takeaway #1 – Family Offices Are Generally Long-Term Focused, Leveraging a Heavy Allocation to Alternatives to Deliver Outsized Returns
Key Takeaway #2 – Family Offices Are Still Heavy Users of Alternatives, But Their Focus Has Shifted More Towards Real Assets of Late
Key Takeaway #3 – CIOs Are Generally Looking to Increase Illiquidity in 2024 Across Private Credit, Infrastructure, and Private Equity
Key Takeaway #4 – CIOs Family Offices Are Increasingly Using Private Market Allocations to Both Boost Returns and/or Act as a Source of Diversification
Key Takeaway #5 – Getting the Asset Allocation Right in Today’s Environment Is the Number One Focus of CIOs Today
Conclusion
“At a time of record low activity across the global capital markets, many allocators have been sitting on the sidelines of late, particularly regarding private investments. However, this positioning is not what we are hearing from leading CIOs in the KKR family office network. Indeed, many CIOs who participated in this year’s KKR survey of family offices told us that they plan to increase – not decrease – exposure to Alternatives in 2024. Their rationale: They understand the role the illiquidity premium can play in compounding capital in a tax-efficient manner to build wealth for future generations.” - Henry McVey, CIO at KKR
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