Volatile Times for Family Offices: Increasing Cash and High-Quality Asset Allocation, Awaiting Opportunities
Family Offices in Volatile Times: Increasing Cash and Quality Asset Allocation for Future Moves
At a private investment summit, former U.S. Treasury Secretary and former Federal Reserve Chair Janet Yellen pointed out that the outlook for U.S. interest rate policy remains uncertain, but the current job market is still weak. If a judgment had to be made now, she estimates the Fed has a chance to cut interest rates once this year.
As the President and CEO of Black Spade Capital, one of Asia's leading family offices, Mr. Dennis Tam added that the recent sharp rise in international oil prices has intensified global inflationary pressures. The ripple effects extend to industries such as aviation, manufacturing, logistics, agriculture, and consumption, with businesses and households facing higher costs and volatility. In this situation, while an interest rate cut is not ruled out, the room for it is limited.
Against this backdrop, most Asian family offices have always been pragmatic and cautious. At this stage, they focus on increasing their cash ratio and allocating high-quality fixed-income products to maintain sufficient liquidity, while continuing to closely monitor policy and market signals and avoid excessive leverage. Meanwhile, the U.S. fiscal deficit continues to expand, with the national debt approaching $40 trillion, accounting for about 120% of GDP. The coexistence of a massive fiscal deficit and political pressure to maintain low tax rates means that market structures and policy orientations may undergo repeated adjustments.
In the next 6 to 12 months, investors can consider referencing Berkshire Hathaway's strategy of increasing cash holdings to a relatively high level and enhancing the allocation of assets that are strategic, defensive, and offer stable returns, just as Berkshire recently increased its stakes in companies like Chubb, United Healthcare Group, and Tokio Marine. In his brief exchange with Yellen, Mr. Tam felt that risk diversification is indeed a key point. In the current global situation, a strategy of short-term defense and patiently waiting for the Fed to release clearer signals is also a viable approach.
Caption:
Mr. Dennis Tam, President and CEO of Black Spade Capital (right), and Dr. Janet Yellen, former U.S. Secretary of the Treasury and former Chair of the Federal Reserve
About Black Spade Capital Limited
Black Spade Capital Limited is the family office of Mr. Lawrence Ho, responsible for managing Mr. Ho's private assets and wealth projects. Headquartered in Hong Kong, the company's global investment portfolio encompasses a wide range of cross-border investment projects, and the company is also committed to exploring new investment opportunities. Black Spade Capital's investment strategy aims to broadly cover geographical regions and industries while maintaining diversified asset classes. The portfolio includes stocks, bonds, real estate, healthcare technology, cultural industries, green energy, and pre-IPO investments. In August 2023, the SPAC initiated by Black Spade Capital, Black Spade Acquisition Co, completed a $23 billion business combination with VinFast Auto Ltd. The second SPAC initiated by Black Spade Capital, Black Spade Acquisition II Co, successfully completed a business combination with the global leading media and entertainment giant, The Generation Essentials Group, in June 2025, approximately 9 months after its listing. Black Spade Capital's third SPAC, Black Spade Acquisition III Co, was listed in January 2026.
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