UBS report reveals: Which families are increasing their investments in Chinese assets

Recently, UBS Group AG conducted a global family office survey, with a total of 317 clients from major countries and regions participating, including the United States, Latin America, Switzerland, Europe, the Middle East, and the Asia-Pacific region.

Among them, 73 family offices from the Asia-Pacific region participated, accounting for more than a quarter of the total sample, making it the second-largest surveyed region in this research.

The wealth scale covered by this year's survey reached a historical high. The average net worth of the surveyed families was USD 2.7 billion, with a total net worth of USD 651 billion. The average assets managed by family offices were USD 1.1 billion, while the total private wealth managed by family offices was USD 283.9 billion. From 2020 to now, the total net worth of global family offices has been on an upward trend.

UBS pointed out that in terms of asset allocation, family office investors, as mature investment entities, tend to overlook short-term market disturbances and focus more on achieving long-term investment goals. Most family offices aim for long-term growth of their investment portfolios and higher returns while enhancing diversification.

Below are the investment trends identified by UBS in this survey, summarized by ZhiShiTang for readers.

Reducing Cash Allocation and Shifting to Stocks

In traditional asset classes, family offices are continuously reducing cash allocation. The planned cash holding ratio for 2025 is only 6%. Due to low cash yields, family offices hope to achieve wealth preservation and appreciation goals by allocating more global assets. Currently, more funds are flowing into stock assets in developed markets.

In terms of alternative assets, family offices are generally increasing their investment in private debt to enhance yield levels and improve portfolio diversification.

Looking ahead to the next five years, developed market stocks remain the most popular asset type. 48% of Asia-Pacific family offices plan to increase their holdings in developed market stocks, while another 40% plan to increase their holdings in emerging market stocks.

Plans to Increase Gold Allocation

The allocation of alternative assets is on a continuous upward trend. Family offices are expanding private equity investments through direct investments, funds, and fund of funds (FOF), and there is also a trend of increasing private debt and infrastructure investments.

Additionally, about one-third of family offices plan to increase their allocation to gold and precious metals. This trend is particularly significant in the Asia-Pacific and Middle Eastern regions, where 33% of family offices plan to increase their gold allocation, the highest proportions globally.

“ This year, we have seen the highest number of family offices increasing their allocation to gold and precious metals in history. ” The head of UBS Wealth Management stated in communications.

From a regional allocation perspective, the main assets of global family offices are still concentrated in North America and Western Europe, accounting for about 80% of total assets. The assets in these regions are still regarded as the preferred choice due to their long-term return stability and cost-effectiveness advantages.

Strong Interest in Chinese Assets

Global family offices' interest in investing in China is increasing year by year. 19% of global family offices plan to increase their allocation to this region, up 3 percentage points from 2024.

In the Asia-Pacific region, this proportion is 30%, an increase of 6 percentage points year-on-year. Family offices in the Middle East have the strongest interest in China, with 45% indicating they will increase their allocation in the next five years, the highest among all regions. Previously under-allocated institutional funds have flowed into the Chinese market through mechanisms such as QFII, reflecting a trend of rising market confidence.

In terms of emerging markets, China and India are the most favored investment destinations for global family offices in the next 12 months. 39% of family offices in the Asia-Pacific plan to increase their holdings in mainland China assets in the coming year.

Long-term Investment Direction: Pharmaceutical Technology and Innovation

In terms of investment approach, family offices generally prefer active management. Data shows that 78% of family offices in the Asia-Pacific region adopt active investment strategies, including stock picking and targeted investments in specific industries or regions.

In the field of emerging technology investments, surveyed family offices have shown high interest in pharmaceuticals, healthcare, electrification, and artificial intelligence. In the Asia-Pacific region, nearly one-third of family offices already have clear investment directions or strategies in areas such as pharmaceuticals and generative artificial intelligence.

Artificial intelligence is widely regarded as significantly beneficial to the banking and financial services industry, as it helps reduce costs and improve efficiency. Additionally, the application of AI in drug development is also viewed positively, which will benefit biotechnology and pharmaceutical companies.

In terms of sustainable and impact investing, global family offices are more inclined to address the root causes of social issues through strategic philanthropy and impact investing, seeking long-term effects rather than just providing short-term donations. Education is one of their key focus areas. Globally, 44% of family offices support educational development through charitable means, while the proportion in the Asia-Pacific region is 30%.

Medical technology and innovation are also widely regarded as long-term investment areas. In the Asia-Pacific region, 61% of family offices have supported medical technology and nursing-related projects through investments.

In the face of these potential risks, family offices typically adopt diversified investment strategies as a response. 40% of family offices diversify risks through active management and hiring professional investment managers. Nearly one-third of family offices introduce hedge funds as a tool to cope with market volatility. Additionally, some family offices enhance their portfolio's risk resistance by increasing illiquid assets (such as infrastructure and real estate), high-quality fixed-income assets, as well as gold and precious metals