Family offices now see inflation as their No. 1 worry, underscoring how rising costs of goods and services are vexing even the richest investors.
Inflation supplanted trade wars and tariffs as the biggest concern for such private investment firms this year, according to Citigroup Inc.’s annual global family office report, which is based on surveys of 350 firms in more than 40 countries conducted in June and July.
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“These are very successful individuals and families, so one might think, ‘Hey, they have so much money, why would they care?’” Andy Sieg, the New York-based bank’s head of wealth, said in an interview. “These families have been very successful because they are attentive to costs as well as revenue. They’re very aware if aspects of their lifestyle are becoming more expensive.”
Inflation was followed by changes in interest rates and stability of the global financial system as the dominant concerns cited by family offices, suggesting rising anxieties about the structural soundness of the economy in the face of numerous pressures from soaring prices to war. Inflation of more than 3% in three of the four major world economies has kept interest rates high and slowed growth, according to Bloomberg Economics data.
Still, more than 90% of the family offices surveyed said their investment portfolios posted positive returns this year, and almost half said they had boosted their exposure to public equities in the first half.
