2021, The Year of Prosperity and Growth – Our Predictions

One week into the New Year and we are already writing history with a third National Lockdown underway in the UK and a likely divided government awaiting President-Elect Biden when he takes office in just two weeks’ time.

While it might not appear to be a text-book great start to the year, we are expecting great things to come from 2021 and these are our top five predictions:

• More Family Offices. We may only be seven days into 2021 but we have already received several enquiries from professionals looking to establish a Family Office for the first time. Factors include inheritance, portfolio diversification and those seeking more flexibility and autonomy amid continued economic uncertainty. We believe this to be a microcosm of the Family Office marketplace, on track to grow to 263,500 globally by 2025, as forecasted by PwC.

Intergenerational Wealth Transfer. Undoubtedly caused by the impending changes to taxation policy under Biden, more Family Offices are considering their long-term multigenerational goals and a large part of this conversation is intergenerational wealth transfer. When surveyed in December, 65% of our Family Office network said they had a succession plan in place following the Coronavirus Pandemic and we expect more Family Offices to follow suit while thinking of ways to integrate their next generation in 2021. Without perhaps, offering them the position of leadership.

• Hiring the Next Generation. As part of this conversation, more and more Family Offices will look to hire their next generation of leaders as current next-gens think more towards philanthropy and purpose. You can download our white paper on Intergenerational Leadership where we speak to four Family Office leaders from across the world who are all opting to hire their next generation for entirely different reasons – a trend we expect to see more of in 2021.

• Portfolio Diversification. Over the last 12 months, the Biotech industry in the UK has exponentially grown, facilitated by the recent Pfizer and BioNtech vaccine which made Single Family Office, Athos Service, $12BN richer. Following the first wave of COVID-19 in March, Family Offices typically focused on real estate and retail were also forced to think differently about their investments, thinking ahead to modern technologies and new markets such as PPE and ventilator production. This alongside the next generation, keen to revolutionise the Family Office environment, will likely result in more portfolio diversification in 2021.

We asked next-generation leaders what they would change after taking succession and 60% said they would diversify the investment portfolio.

• Relocating overseas. During the last months of 2020, we had several conversations with Family Offices looking to move their Family Office overseas in 2021. Last year we saw the likes of Ray Dalio move his Family Office to Singapore and helped several other Family Offices do the same. With Brexit, COVID-19 and new playgrounds popping up across the map including the likes of Hong Kong, we expect many Family Offices to relocate in 2021 as ultimately two factors prevail: Talent and Opportunities. The question that remains, is where.

Of course, we can also expect a continuation of the next generations efforts to increase the presence of ESG and Impact Investing and also expect technology to continue to transform Family Offices making the prospect of virtual working and in fact, virtual leadership more common but these are the five predictions we are most excited about.

Do you agree with our predictions for 2021 and, do you have any of your own?

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2021-01-07T09:44:12+00:00