Infrastructure projects such as energy facilities are among the investments high-net-worth families should now be focusing on, according to the Wigmore Association, a global collaboration of chief investment officers from six leading family offices.
These investments are seen as one of three major trends by the six family offices, which represent some of the wealthiest families in North America, Europe and Australia. Traditional public sector projects such as bridges, roads and hospitals are increasingly being supplanted by private/public partnerships, which provide long-term, low-risk investments, usually with significant dividend components, according to Wigmore.
The threat of inflation was cited as the second major trend that high-net-worth investors need to be aware of by the association. Inflation probably does not pose an immediate short-term risk, but it could become a rising threat over the next three to five years, the association concluded.
"Most members are advising clients to reduce core fixed-income holdings in favor of more strategically diverse holdings, such as emerging market debt and non-discretional hedge funds," Wigmore said in a prepared statement.
The group said it is closely following the European debt crisis and hopeful that political and financial leaders will be able to create fixes to the situations there. Wigmore also is keeping its eye on the evolution of emerging markets.
Wigmore includes Pitcairn, the Myer Family Company in Australia, HQ Trust in Germany, Northwood Family Office in Canada, Progeny 3 in the United States and SandAire in the United Kingdom. The association's goal is to further understand issues of importance to the families they serve.
-Karen DeMasters