Expand chart
Data: UBS Global Family Office Report 2018; Chart: Naema Ahmed/Axios

A look at ultra-rich families finds they aren't necessarily looking to maximize their investment returns. Most of them concentrate in whole or in part on simply preserving the capital they already possess.

Their main concern is never running out of money.

By the numbers: The UBS Global Family Office Report 2018 looks at where 311 family offices invest their money. Top two takeaways:

  1. These families are rich: The average family net worth is $1.1 billion, while the average amount of assets managed by each family office is $808 million.
  2. These families care a lot about liquidity. On average, they have 7% of their assets in cash. That works out to more than $50 million per family, on average.

Even with that large cash allocation, 2017's returns were excellent. Investments rose 15.5% overall, thanks to a great performance from public equities. That was a significant improvement over 2016, when family-office investments rose 7%, and from 2015, when they were basically flat.

There's also a lot of new money here: 67% of the family offices were founded in 2000 or later.

  • In some ways, though, they're still old-fashioned: Only 9% of the family office CEOs are women.

The asset allocation trends are surprising.

  • Overall, the families invest only 44% of their wealth in stocks and bonds. There are a lot of private investments, in both companies and properties, which might in part explain why private-equity giant Blackstone sees its assets under management reaching $1 trillion by 2026.
  • But public equities are increasingly popular. Their 28% allocation is up 5 percentage points from 2016.
  • Hedge funds have fallen out of favor, with their 5.7% allocation down 3.2 percentage points from 2016.
"If you look at hedge funds over the last five to eight years, they offer much lower returns than the rest of the market. The purpose of a hedge fund is to limit your downside risk, but you’re not going to get the upside as well."
The CEO of a family office, quoted in the report

Go deeper

Democrats on Trump tax story: "This is a national security question"

House Speaker Nancy Pelosi said Monday that the New York Times report that President Trump has hundreds of millions of dollars in debt coming due within the next four years is a "national security question," and that the public has a "right to know" the details of his financial obligations.

The big picture: Democrats have already leapt on the Times' bombshell, which Trump has dismissed as "total fake news," to attack the president for allegedly paying less in federal income taxes than the average middle-class household.

Dan Primack, author of Pro Rata
Updated 58 mins ago - Politics & Policy

Unsealed opinion: Trump TikTok ban likely overstepped legal authority

Illustration: Sarah Grillo/Axios

A federal court judge on Sunday granted TikTok's request for a temporary restraining order against a ban by the Trump administration.

Driving the news: Judge Carl Nichols on Monday unsealed his opinion, in which he concluded that the ban seeks to regulate the exchange of "informational materials" — something that's expressly exempted from the law laying out the emergency powers Trump invoked.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 12 p.m. ET: 33,156,812 — Total deaths: 998,696 — Total recoveries: 22,961,436Map.
  2. U.S.: Total confirmed cases as of 12 p.m. ET: 7,118,523 — Total deaths: 204,790 — Total recoveries: 2,766,280 — Total tests: 101,298,794Map.
  3. Business: Companies are still holding back earnings guidance.
  4. Health: The childless vaccine — Why kids get less severe coronavirus infections.
  5. World: India the second country after U.S. to hit 6 million cases