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February 15, 2023

The Asset: Sustainability moves up family office agenda

NextGen gains bigger influence on investment planning, sets sights on wider range of asset classes

Family offices are placing greater emphasis on succession planning as the influence of the next generation drives increased interest in sustainable investment, according to a new report.

The impact of Covid-19 has accelerated the integration of succession planning into long-term strategies of family offices. And as a result, younger generations are gaining a bigger influence on investment planning, according to the study from Aeon Investments, a credit-focused investment company based in London.

The firm commissioned market researcher Pureprofile to interview 100 senior investment managers and wealth managers working for family offices with a total of US$98.4 billion assets under management in the United Kingdom, the United States, Switzerland, Germany, Italy and the Nordic region in November 2022.

The study finds that 39% of respondents strongly agree that younger family members are driving increased interest in sustainable investment. Another 58% slightly agree.

And in view of the impact of the pandemic, family offices are increasingly diversifying into a wider range of asset classes to meet investment goals, according to 88% of respondents.

While 44% of family offices plan an inter-generational wealth transfer within 10 years, nearly a quarter (23%) do not expect to make such transfers for 15 years or more.

“Family offices are understandably placing a strong emphasis on succession planning, but it is clear from the research that the next generation is already having an impact with a greater focus on sustainability,” says Aeon chief operating officer Ben Churchill. “At the same time there is clear evidence that family offices recognize the need for increasing diversification into a wider range of asset classes.”

The Asset

Sustainability moves up family office agenda

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