Investors at family offices can't get enough of geopolitics and public policy.
Representatives from about 75 single-family offices met at the Beau-Rivage Palace Hotel in Lausanne, Switzerland this week for Institutional Investor’s 11th annual European Single Family Office Symposium.
A conference executive said the two sessions dedicated to changes in governments and to foreign policies — and their economic impacts — stirred family offices more than any other this year.
“Geopolitics and public policy, those got the most questions from the audience,” according to Alex Beveridge, an executive director at II who planned and attended all the sessions. It felt like geopolitics had reached peak interest with family offices in 2023 but this year proved that wrong, Beveridge added. (Family offices considered geopolitics a top risk last year, according to surveys of those investors.)
A mix of family-office principals — the members of the families who are ultimately in charge of their wealth — and their employees inquired about all kinds of subjects within the broad topic of geopolitics.
Unsurprisingly, given the conference location and where many of its attendees are based, many people wanted to discuss the war in Ukraine and other conflicts, and what they mean for markets and certain sectors. How European countries were arming themselves and other states, and what impact that would have on defense stocks was debated by family offices. Some suggested that current conflicts, and potentially others, were priced in already. Others said the demand for weapons and related things will persist, boosting defense stocks even higher.
They also discussed the relationships between geopolitics and some of the investment industries' mega trends, such as ESG. Tensions between the U.S. and China have also clouded the future for markets and some investments. “That's where there were a lot of questions because if you really are managing long-term capital, you've got to keep your eye on that particular ball,” Beveridge said.
Still, family offices aren’t created to deliver macroeconomic forecasts. They are generally consumers of research and use the information to choose companies and adjust their portfolios. “People are really interested in these big seismic issues. But at the end of the day, it's about investing in good companies,” Beveridge said.
A record number of single-family offices were represented at the symposium this year. The majority were from Europe and a significant number came from London and Geneva (or at least that’s where their investment staff are based). Other attendees were from New York, India, and Singapore.
Most have portfolios with between $100 million and $500 million in assets but some are managing more than $1 billion. About one fifth of attendees are principals and many of the families still own a successful company that is continually generating cash for them to invest.
