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Millennials are driving a change in how the super rich invest their money

by Varada Bhat
November 27, 2018

Millennials are driving a change in how the super rich invest their money

by Varada Bhat
November 27, 2018

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  • Nearly one in three family offices were engaged in sustainable and impact investing in 2017, with nearly half of them planning to increase their investments in the next year.
  • Family offices are private offices that manage the wealth of ultra-high-net-worth investors.
  • According to a survey by UBS and Campden Wealth, 39% of respondents projected that when the next generation takes control of their family's wealth, they will increase their allocation to impact and environmental, social and governance (ESG) investing.

Family offices are bracing for big changes driven by millennials. In 2017, nearly one in three family offices were engaged in sustainable and impact investing, with nearly half of them planning to increase those investments in the next year, according to a survey conducted by UBS and Campden Wealth.

With nearly two-thirds of next-generation heirs expected to take over within the next 10-15 years, family offices are starting to tailor their investments based on their preferences. Family offices are private offices that manage the wealth of ultra-high-net-worth investors.

According to UBS and Campden's annual survey on family offices, the next generation will raise their investments in impact and sustainable investing.

"39% of respondents projected that when the next generation takes on control of their families' wealth, they will increase their allocation to impact and environmental, social and governance (ESG) investing," the report said. The report was based on surveys of 311 family offices across the world. Each respondent, either worked or managed assets for a firm with an average of $1.1 billion.

Globally, there are now $22.89 trillion of assets being professionally managed under responsible investment strategies, an increase of 25% since 2014, according to the Global Sustainable Investment Review. The most commonly invested areas include clean energy, water, gender equality, and healthcare. 

Private equity and equity markets are the popular vehicles for impact and sustainable investing, making up 67% and 39% of their respective portfolio allocations. Others notable areas included real estate (27%), microfinance (21%), and private debt (20%).

 

This article was written by Varada Bhat from Business Insider and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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