How do you choose the best asset allocation for your family office? This question probably has as many answers as there are family offices. Each one will have a unique style dictated by the values, vision and purpose of the individual or individuals behind it. Yet while the focus of one family office may differ greatly from another, all tend to have a common mission: to preserve and grow the wealth of the founding family for the long term, preferably spanning generations.
Thus, certain basic investment principles often apply, such as building a diversified portfolio and being focused on asset allocation. And when setting long term strategic asset allocation bands, an increasingly common question is whether crypto should be part of the asset allocation.
According to research cited by Forbes, 1% of the average family office portfolio is invested in cryptocurrencies, which equates to an average of approximately $11 million of crypto holdings for each office. For those family offices yet to commit to crypto as an asset class, we know that the subject comes up time and again in investment committee meetings.
Industry commentators frequently refer to bitcoin as digital gold, and there are some parallels between the two when you look broadly at the history of money and the evolution of its functions.