The third annual Simple Family Office & Private Wealth trend review explores the ten most influential trends in the private wealth space. These are some the key takeaways for 2021:
1. From 2020 onwards, everything is a political statement
Corporations that ignore global movements like Black Lives Matter do so at their own risk. Investee business need to be cognisant of current societal conversations and move from reactive compliance to proactive commitment.
2. Cause-washing becomes the new green-washing
Just claiming to be ‘eco-friendly’ doesn’t wash any more; consumers want their brands to support a cause, and businesses know it.
3. Distrust of technology and the tech-giants continues to grow
Cyber-security is increasingly important to family offices.
4. Privacy becomes the new “gold” in the face of data breaches
In a world of invasive 'KYC', data breaches, and digitisation, private investors value privacy now more than ever.
5. Investment in tech surges as the world goes digital
Business models of the future that do not embrace technology will be left behind.
6. The rise of locality changes the real-estate game
Real estate investment is no longer just a strategic asset class - property investors are looking at how to 'build back better' in a post-pandemic world. Co-working space is a prime example.
7. Activism becomes mainstream through ESG and impact investing
Investee business are incentivised not just by competitive gains but also reputational ones.
8. More dramatic changes to asset-class definitions and allocations
Family offices are shifting allocations to alternative asset classes. Some leading asset managers are even starting to recommend that investors include a small allocation of their portfolio to cryptocurrencies.
9. Cultural values are leveraged to drive behavioral change
Family businesses that invest globally need to be culturally-sensitive.
10. The rise of political geographies
The rise of modern trade wars and the Covid pandemic has taught us that globalisation is fragile. Geopolitical borders are still a reality and private investors need to be aware that, for example, investing in China is not the same as investing in the US.
The effects of 2020’s various social, technological, political, and environmental events have profoundly shaped future trends. Yet, even in what has often seemed like chaos, there is opportunity for those who will seize it.