In an interview with Al Arabiya TV, Abdulmohsin Al Omran, founder and CEO of The Family Office, discussed wealth preservation through alternative investments. Below is a summary of the main points:
- Investors’ tendency to take higher risks, like investing in works of art and classic cars, indicates a boom in the market. Family offices in the region do not follow this direction due to increased risks in such investments.
- With the rise in equity markets, investors should sell part of their investments and invest in alternative assets like real estate, private companies, and credit assets to preserve their wealth and decrease volatility in their investment portfolios.
- Investors were once accustomed to earning 7 to 10% annually from bonds and shares. With low interest rates, the price-to-earnings ratio in the S&P 500 reached 27 times, showing that alternative investments are the only solution for many investors.
- Office real estate is suffering due to Covid-19 and the shift from office to remote work.
- Real estate investments are promising in Asia, particularly China, the Philippines and Hong Kong where the buildings constructed rival those in New York and the UK and are leased by the biggest companies.
- The Family Office focuses on preserving wealth and not taking chances venturing to achieve wealth.