An increasing number of family offices are expected to make the Middle East their headquarters, driven by the significant wealth creation opportunity in the region, according to a senior Citi Private Bank executive.
“We are seeing more and more businesses and families beginning to headquarter themselves in the Middle East. The region is becoming an increasingly important location for Citi to better engage with clients and to create wealth in the region,” said Selim Elgen, MEA Head of Citi Private Bank.
“We are also seeing that our clients in the region are at various stages of the wealth transition to the next generation and we have a very focused strategy on dealing with this entire opportunity,” he added.
In its 2023 Family Office Survey, Citi Private Bank’s Global Family Office Group highlighted the top three concerns for family offices including inflation, interest rate increases and geopolitical uncertainty amidst heightened US-China tensions.
However, these priorities vary by region, with the Russia-Ukraine war being the primary concern for the Middle East and Europe at 52%, rate increases in North America (64%), US-China relations in the Asia Pacific (64%) and inflation in Latin America (63%).
While Asia Pacific was the region where most respondents (36%) reported portfolio declines, Europe, the Middle East and Africa reported gains of 72%. In addition, respondents were more bullish toward global investment grade fixed income in Europe, the Middle East and Africa (73%).
Family offices in Europe, the Middle East and Africa were the most committed to leadership succession plans. Even though every region scored low on family education programmes for the next generation, especially Europe, the Middle East and Africa and Latin America reported alarming levels of “no” responses at 74% and 71%, respectively.
Technology was the most popular sector for direct investment in every region apart from Latin America, where there was a preference for real estate (57% vs. 43%).
Another disparity was in attitudes toward healthcare, where 58% of family offices in Europe, the Middle East and Africa and 56% of family offices in Asia Pacific named the sector among their top three, compared to 26% in North America.
The Citi survey included over 40 questions aimed at gauging clients’ investment sentiment and portfolio actions in the wake of ongoing geopolitical tensions, macroeconomic headwinds and market volatility in early 2023. It drew responses from 268 participants.
(Editing by Brinda Darasha; firstname.lastname@example.org)