Family business owners are more comfortable investing in tangibles and businesses than other wealthy families, according to new research, allocating three times as much to direct private equity and almost twice as much to real estate as their non-business owning counterparts.
The study, by family office networking centre Family Office Exchange (FOX) and the University of Chicago Booth School of Business, compared the investment decisions made in 2012 by business-owning families, and "financial" families – wealthy families without an operating business.
Sara Hamilton, chief executive of FOX, said in a statement: "The research suggests that business-owning families have more of a preference for tangible assets over which they've more control."
Business-owning families allocated an average of 17% of their assets to real estate and 12% into direct private equity, compared to 9% and 4% by financial families.
Fixed income, public equities and hedge funds were favoured much more by financial families than business owners.
Hamilton added that the fact financial families preferred to retain liquidity was unsurprising, as they cannot rely on an additional steady income stemming from a family business.
The research also found 83% of respondents planned to shift their asset allocation in 2013, with a move away from fixed interest to higher yielding assets. Real estate, real assets, private equity and emerging markets were listed among the top opportunities for 2013.
The respondents were alumni of the University of Chicago's Private Wealth Management course. Fifty-five percent of participants had more that $26 million (€19.9 million) in assets.