Deloitte Middle East Family Office Survey: Positioning to thrive has been saved
Deloitte Middle East Family Office Survey: Positioning to thrive
6 December 2020 – Deloitte launched its second Middle East Family Office Survey providing insight from over 80 of the most prominent family groups across the Middle East, exploring how they navigated the crisis, their areas of focus, and how they feel about the future.
The Deloitte survey finds that optimism has emerged as a dominant theme despite the ongoing challenges and risks which were identified. While 70% of the families reported that revenue has reduced by 10% or more over the past 12 months, 75% of respondents predict revenue will revert to 2019 levels within the next 18 months. Expansion through new products/markets remains one of the key priorities together with cost rationalization and wider transformation exercises. Resilience was also explored at a country level with responses highlighting that the largest economies are deemed to be both the most impacted but also the most primed to recover.
“This year’s edition of the Middle East Family Office survey was particularly interesting and the results equally surprising as we would expect areas like optimism to rank low or not appear at all as a theme. Each aspect of the family ecosystem was explored from the governance and succession of the family, the challenges and opportunities within their operating businesses and investments, and the outlook and structuring of their private wealth,” said Scott Whalan, Partner and Financial Advisory’s Family Office Leader, Deloitte Middle East.
Succession is the top priority for family governance with almost half of all respondents selecting this as one of their top three areas of focus; however, a notable 59% of respondents felt their legal family governance framework is currently not fit for purpose. Sustainability continues to be paramount for regional families, in particular, the ability to transition leadership. The results demonstrate that 14% of respondents consider their Next Gen are able to lead immediately, with 64% of the families believed the Next Gen will be ready to lead within the next five years.
From a private wealth lens, the Deloitte survey finds that many of the families were braced for impact; however, some aspects of the family office required swift action. Technology and risk management stand out as the most exposed areas going into the pandemic. Looking ahead, the update of investment strategies remains a priority with 67% of family offices planning to invest over the next 12-18 months across both regional and international markets.
“The resilience across the entire family ecosystem has been tested by the recent pandemic. Whilst many families have successfully adapted and realigned priorities, further work remains across areas such as succession planning, private wealth structures, and optimizing business performance and investment portfolios. The theme has shifted from one of pessimism to optimism as families focus on positioning to thrive in the new normal,” concluded Whalan.
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