Europeans Move Wealth to Hedge Funds, Commodities

Europe’s richest families are shifting their investments from traditional assets to hedge funds and commodities, according to a new report profiled by Reuters.

Campden Media and Merrill Lynch surveyed 30 European single family offices in 10 countries and found that alternatives would make up more than half of their portfolios in three years.

The family offices said the current 52% allocation in traditional investments such as stocks, bonds and cash would fall to 45%, while the 48% invested in hedge funds, commodities, private equity and property would rise to 55%.

While equities make up 34% of their portfolios currently, in the next three years they could fall to 31%. Exposure to hedge funds and funds of hedge funds combined is expected to grow from 14% to 18%, and exposure to commodities is expected to quadruple from 1% to 4%.