Hedge fund allocations from the fast-growing family office sector are set to increase during 2019, according to data released by Family Office Networks (FON).
According to the network of 10,000 global family offices with USD15 trillion in assets, the appetite for various hedge fund strategies is increasing, with more capital being allocated to traditional Long/Short, Global Macro and Managed Futures strategies as a hedge against recent volatility in the marketplace. In addition, FON is seeing newer strategies grow in popularity for investment such as blockchain, artificial intelligence and cannabis funds.
“Roughly 30 per cent of the family offices that we have surveyed over the past few months have mentioned that they plan on increasing their allocation into hedge fund products,” says Andrew Schneider, Founder and CEO of Family Office Networks. “With the broader capital markets being down last year, family offices are looking for preservation of capital. With that in mind, we are planning a number of high profile hedge fund thought leadership events this year beginning with a West Palm Beach event on March 26 and a New York City event on 16 April. We invite fund managers to submit their tear sheets for consideration.”
“We are seeing a surge in interest in the hedge fund sector among substantial families which is good news for managers who seek allocations from family offices. Often, however, family offices can be hard to find and challenging for fund managers to get in front of them to tell their story. Our group has a global network of 10,000 family offices and we help educate them about various products and services.”
Michael DeLuca of DeLuca Family Office, says: “We’re planning to allocate an additional 10 per cent to hedge funds in the first quarter of this year and are in the process of conducting due diligence on a select few. In addition, we’re seeking to broaden our outreach to identify other top tier managers for the balance of the year.”
Adam Goldstein of Goldstein Family Office, adds: “We get approached by a number of hedge funds but unfortunately 2018 showed lacklustre performance by many of them. That said, we’re on the hunt for the best performing funds out there which have the potential to deliver in the months and years ahead.”