Gold's evolving role in the portfolio and the next Prime Minister

Family Office Insider (FOI) | August 2022

Hello, and welcome to this month’s premium edition of Family Office Insider (FOI) from Global Partnership Family Offices (GPFO).

At a glance:

1. Gold | Krishan Gopaul, Senior Analyst at the World Gold Council, makes a case for the gold’s position in the portfolio.

2. UK Politics | Bruce Anderson muses on the current race to be the leader of the Conservative party and Prime Minister.

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1. Family offices can still call upon the golden ticket

A pre-publication of the article from the upcoming Summer/Autumn Edition of Family Office Global (FOG).

by Krishan Gopaul, Senior Analyst at World Gold Council.

It never rains but it pours, or so the old saying goes. It is a saying that investors can probably relate to, having faced compounding challenges of late. Family offices are acutely aware of the rapidly shifting economic and geopolitical landscape, with many re-positioning portfolios to achieve their primary goal of wealth growth.

The seismic changes of the last two years have generated significant headwinds for investors. Inflation has spiralled to multi-decade highs thanks to the one-two combination of unprecedented fiscal and monetary policies in response to the pandemic, followed by supply chain and energy price-shocks caused by the conflict in Ukraine. This has implications for many aspects of portfolio performance, from return generation to risk management and beyond. Family offices clearly recognise this threat: ‘high inflation’ topped the list of concerns in the recent UBS Global Family Office Report 2022 [read our summary here].

Focus shifts to riskier alternatives in the face of inflation

Return generation remains the top priority for family offices. And, in pursuing this goal in an environment where real returns are eroded by persistently high inflation, they have become increasingly open to moving into riskier assets. The UBS survey confirms a continuation of the recent shift towards private equity/alternatives.¹ But while these assets can provide attractive returns, they come with health warnings. BlackRock Investment Institute highlighted in its 2022 mid-year outlook that “private market valuations are not immune in this new regime of