This year, family offices put 27.1% of their portfolio investments into public equities.
During the same period, real estate investments dropped to 16.2% of the average portfolio, down 0.7% from a year earlier. Further analysis by UBS and Campden Research concludes that the increased popularity of public equities is due in large part to advisors’ efforts to quickly offset losses sustained in 2015.
Because public markets are more widely accessible than private and offer a greater level of liquidity, it is also likely that many family office advisors made the move to stock investments as a means of ensuring that funds could be released whenever necessary and made available for rapid shifts in strategy. However, considering the volatility of the public equity market, investing in stocks over commercial real estate is a high-risk strategy with the potential to result in heavy portfolio losses over the long term.