ZURICH / LONDON (Reuters) – Billionaires taken in charge by Swiss bank UBS UBSG.S are looking to remove some of their cash from stocks after enjoying an all-time low and rapid rally from March to May, the world’s largest wealth manager said Thursday.
During the debacle of stock markets around the world in March, UBS’s richest clients took out loans to put billions in plummeting stock markets. They are now looking to take that money out of stocks and put the profits in illiquid and private assets, the head of UBS’s global family offices told Reuters.
Their strategy has helped the family offices that manage the financial affairs of the world’s richest hedge funds and across all markets outperform their target benchmarks through May, according to the bank’s survey of 120 family offices. , with an average family fortune of $ 1.6 billion, released on Thursday.
“We had record loans written in mid-March and mid-April, large family offices that asked us for a balance sheet and then entered the market,” Josef Stadler said in an interview. “They bought, for example, US stocks, but they didn’t buy $ 50 million. They bought over a billion of these stocks to rebalance. And they made a lot of money.
Known as the “billionaire fortress bank,” UBS said its wealthiest clients served by individual family offices were now looking to invest in residential real estate and private equity, or to close commercial and strategic deals.
Stadler said the trend has been widely seen in Asia and that he expects it to accelerate in the last quarter of 2020 and into the first months of 2021. As a result, he expects what the stock markets soften for the remainder of this year.
But in the longer term, just under half of the family offices surveyed by UBS intended to increase their equity allocation over the next 2-3 years.
When asked if the unrest in Hong Kong and its tensions with mainland China had affected investment decisions, Stadler said UBS had not seen the family office’s money flowing from Hong Kong to other jurisdictions.
“They made their arrangements years ago, where they want to be on the map,” he said, adding that these clients tend to keep their money in multiple jurisdictions and base their decisions on strategies. long-term.
Reporting by Brenna Hughes Neghaiwi and Simon Jessop; Editing by Elaine Hardcastle