The recently released KKR 2023 Family Capital Survey, Loud and Clear, found family office CIOs plan to increase their exposure to private credit, infrastructure, and private equity — reducing their holdings in public equities and cash. The report, based on a survey of 75 family office CIOs, offers a detailed look at asset allocation strategies and issues affecting investments such as global security, industrial automation, AI, and labor productivity.
Most (60%) of the survey respondents have between $1 billion and $5 billion AUM; 40% are in the U.S., with 37% in EMEA.
The survey also found:
- More than 70% of respondents align investment teams’ compensation to the performance of the investment portfolio.
- In a detailed look at AI — and how it will affect everything from investment strategies to power consumption — the survey asked how respondents think AI will affect their family office. The most common response (38%) was that it will lead to opportunities to invest in tech-enabled businesses. A smaller group (18%) said it will provide opportunities for efficiency in their employment model. Just 8% said it would lead to disruption and value destruction of existing assets. And 38% answered “all of the above.”
- More than three-quarters (77%) of respondents have a family member on their investment committee. Just 41% have an external advisor.
- Regional differences were clear in answer to a question about the primary risk to markets today. Overall, more pointed to geopolitics than to inflation, but for U.S. respondents, inflation was the top worry.
- Almost all (93%) of respondents said a primary focus of their family office is growing assets; 44% cited preserving capital, and 35% said generating income.
The KKR report generated coverage by a number of outlets:
- Family Offices Are Boosting Allocations to Alts in 2024, KKR Says (Institutional Investor)
- Family Offices Plan to Increase Alts Allocations (Chief Investment Officer)
- Alts winning out as family offices evolve their strategies (InvestmentNews)
- Family Offices Cut Stocks, Boosted Real Assets in 2023, KKR Says (Bloomberg via Yahoo Finance)
- KKR’s Henry McVey sees Asia family offices taking lead in real asset allocation (Deal Street Asia)