Recent Family Office Trends in the GCC

New Growth Outlook

In the past, family offices in the GCC traditionally operated with a more preservation-driven mindset in order to protect their assets for future generations. In recent years, however, they’ve altered their focus to diversifying family holdings and growing wealth. This new, proactive attitude has led to a change in investment preferences, bringing an increased interest in direct private investments and co-investments to private companies. These direct investments have typically lead to higher return potentials, better diversified risks, and lower investment management fees paid by family offices.

Expanding Investment Range

Previously, wealthy individuals in the GCC typically managed their assets without a centralized dedicated team and designated set amounts to put into stocks, bonds, and cash. Now, having created their own funds, family offices are investing in areas that diversify their assets. This allows them to have more control as to where their money lands, as well as holdings in assets that better balance the financial risks involved.

Investment Profile

When buying operating companies, family offices typically take a so-called Warren Buffett approach and look for investments with an indefinite time frame rather than mapping out a short-term plan in hopes of modifying the business and selling it again in a few years. They typically seek companies that have a long, sustainable growth trend or are rooted in a specific region. They’re also often interested in companies with a strong history of stable cash flow and dedicated customer base, as stable cash flow yields are the primary source of return on investment for family offices.

Benefits of Family Offices

Working with family offices can have several advantages, including the prestige and reputation boost that can come with partnering with a prominent or philanthropic family.

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