Deal-hungry millennials still rely on traditional networks for opportunities

By Nicholas Moody

Wealthy North American Millennials are deal-hungry with more than a quarter (26%) involved in more than 20 deals in the past five years, with many relying on family or family offices for advice, new research suggests.

Coming of age: The investment behaviours of ultra-high net worth Millennials in North America found two out of three respondents (65%) had played a role in more than five deals since 2012.

The research by Campden Wealth, in partnership with asset manager OppenheimerFunds, also found almost two-thirds (65%) intend to increase their number of deals in the next three years.

More than half (52%) judge their personal understanding of an industry/ sector as critical to choosing deals.

Financial returns and a clear due diligence approach also received high scores, with a respective 43% and 35% saying they're crucial to the deal-making process.

Commenting on the findings, Campden Wealth research executive Philip Blackburn said: “The hunger for deals that ultra-high net worth (UHNW) Millennials have, means that their private equity allocations are likely to increase from the current level of 10%.

“In the future, as they take control of the family wealth, it will be interesting to see if this hunger for deals has an effect on the family's investment portfolio,” he added.

Despite this eagerness to do deals these wealthy Millennials still rely heavily on a tightly knit professional and familial networks for investment advice – with family members and family office executives being at their heart.

On average, over half (57%) of the UHNW Millennial respondents, from families with net worth's ranging from $35 million to $1 billion, considered family to be very/somewhat important to deal sourcing.

When asked how important different types of advisers were to them when making investment decisions, three-quarters (75%) ranked their family office executives as important or very important.

Subsequently, 93% of Millennials rated the quality of advice from their family office executives to be good or excellent.

The results are based on a quantitative survey of 32 Millennial wealth holders and interviews with six Millennial wealth holders and three advisers.

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