NEW YORK, U.S. - Despite wider political and economic turmoil in 2016, a new research has revealed that the world’s richest families became richer last year.
According to a survey by Campden Wealth Research and UBS, the richest families in the world have had a stellar year financially.
The survey said that the family offices which manage the assets of some of the world’s richest dynasties saw an average return of 7 percent on their fortunes in 2016.
It further noted that the average wealth managed by each of the 262 offices polled was $921 million.
Meanwhile, returns were boosted by surging equities, with both the Dow Jones Industrial Average and the FTSE 100 rising strongly over the period.
Wages however have fallen below inflation in the U.K. and GDP growth has been revised down on both sides of the Atlantic.
The report said that shares and private equity investments now represent almost half of the average family office’s investment portfolio.
According to Sara Ferrari, head of UBS’ family office group, wealthy clients had become increasingly bold with their money over the last twelve months.
Ferrari said, “Family offices have been making the most of their ability to embrace risk and invest for the long term, increasingly accepting illiquidity, much like other sophisticated investors. The benefits of this bolder approach are clear.”
UBS said that it had found that its wealthy clients were increasingly looking to see a social as well as a financial return on their investments.
It noted that of the 262 family offices it surveyed, over 40 percent are expecting to increase their allocations towards impact and environmental, social and corporate governance (ESG) investments.
Surveyors said that this trend was particularly driven by millennials, with families with children born after 1980 seeing an increase in requests to participate in impact investing.
It identified education, environmental conservation and energy efficiency as the most popular sectors to invest in globally.
Over the past 12 months, there was also an increase in philanthropic activity, with the average family office giving $5.7 million during the period.
Ferrari added, "We know that millennials are driving the adoption of sustainable and impact investing. As they strengthen their skill-sets and assume more control, we’ll see this theme continue to take hold."
UBS said that nearly 95 percent of family offices plan to maintain or increase their philanthropic commitments in the coming year.
Environmental protection and poverty saw the most significant jump in donations.