2017 OUTLOOK

"I've always wanted to help build a better society and build a better company, and I always wanted a healthy, vibrant company, a healthy, vibrant society.  We take care of our people, we provide them with opportunity.  But I've always believed business is here to serve your clients, your shareholders, your communities.  If we do this well, everyone benefits.  We have to do a good job for all of them."

Jamie Dimon, CEO, JP Morgan Chase

 

Privos Global Family Office Outlook (2017)

We must start our annual 2017 Privos Family Office Summary first by honoring the victims and their families for their horrific losses sustained on October 1 when a gunman opened fire in Las Vegas killing 59 and injuring more than 527 people in the worst massacre on US soil.  Previously,  the world watched stunned on May 22  when an explosion that appeared to be a suicide bombing killed at least 22 people and wounded 59 others at an Ariana Grande concert filled with adoring adolescent fans, in what the police were treating as the worst terrorist attack on UK soil in years.  We also remember the victims of Berlin (two separate attacks, the most recent occurring last year on Berlin's crowded Breitscheidplatz Christmas market), Zurich, Normandy, Nice, Orlando, Brussels, Paris, San Bernardino, Charleston, Kenya, Ivory Coast, and elsewhere.   It is beyond imagination the evil and devastation that has taken place in the world.  For those of you who have lost loved ones in the wake of this terror, we stand by you.  Our prayers go out to you and your families.

For global family office LP investors, the world has become a complicated place filled with risk and daily change.  It is proving difficult to manage capital and investments in such a fluid environment.  As such, our family office partners rely on us for sound judgment, wisdom and the ability to execute in face of growing global uncertainty.   We leverage our global network of family office partners to make capital allocations, get deals done, and take care of each of our family office partners in good times and in times of uncertainty.   

French Elections

On May 7, 2017, Emmanuel Macron was elected France’s youngest head of state since Napoleon after beating his far-Right rival Marine Le Pen in an emphatic result that will have far-reaching consequences for Brexit and Europe.  The 39-year-old Mr Macron won almost two thirds of the vote, showing a clear path to the Élysée Palace for the pro-EU centrist who was a political unknown until three years ago and has never held elected office.  Addressing the nation, a sober Mr Macron immediately reached across the divide to Le Pen voters, saying he heard the "anger, anxiety and doubts" that many had expressed.  But he did not shy away from his internationalist, pro-EU agenda, saying: "I will defend Europe; it is our civilization which is at stake...I will work to rebuild ties between Europe and its citizens."

Later Mr Macron took the stage to the strains of Beethoven’s Ode to Joy, the European Union anthem, in the courtyard of the Louvre museum.  He said France was facing an "immense task" to rebuild European unity, fix the economy and ensure security against extremist threats. “Europe and the world are waiting for us to defend the spirit of Enlightenment, threatened in so many places,” he told the crowd, as his his wife Brigitte and their extended family joined him, according to London's The Telegraph.

On May 17, the New York Times reported that Macron's cabinet is made up of a carefully chosen cast of characters meant to signal how he plans to govern.  It has some appointments from the left and some from the right; it is evenly divided between career politicians and those who come from the private sector or nonprofits. And it has equal numbers of men and women.  “It is a government of renewal,” the presidential press office said in a statement on Wednesday.  But legislative elections are scheduled for June 11 and 18, and if Mr. Macron’s En Marche! party receives anything less than a decisive majority, he could be forced to make individual changes or even completely reshuffle his cabinet to better reflect the makeup of the National Assembly.  In the meantime, while he will be able to plan legislation and lay out his agenda with his new team, it is unlikely that any major legislation will be turned into law because Parliament will not be in session until after the elections.

Super Bowl, the 89th Academy Awards and Qatar Airways

Earlier this year, we kicked off this year with two American events, first the American Super Bowl in Houston, Texas, which saw the first overtime game in Super Bowl history, stunned the world when the New England Patriots came from behind to win the first tie game in history, beating the Atlanta Falcons 34-28.   American and the world came together on Feb 5 to watch NFL Super Bowl, one of the greatest sporting events in recent memory.  

Next came the 89th Academy Awards on February 26 when Moonlight won the best picture (two minutes after La La Land), and Hollywood crowned Mashershala Ali (Best Supporting Actor), Viola Davis (Fences), Zootopia (Best animated feature), La La Land (Best Cinematography),  Damien Chazelle (Best Director, La La Land),  Casey Affleck (Best Actor, Manchester by the Sea), and Emma Stone (Best Actress, La La Land).

This year also marked the debut of the longest flight in the world when Qatar Airways launched its 17-hour, 30-minute flight between Auckland and Doha, Qatar.Not to be outdone, Qantas will begin to fly a 9,000-mile nonstop between Perth and London in 2018, and Singapore is eyeing a relaunch of its nonstop Newark-Singapore route, which will take just under 19 hours.Many of us at Privos will be taking these and other international flights and look forward to increased global travel and connectivity to help facilitate the work of our multi-family office.

Davos 2017 - Business Agenda Trumps Climate Change and Sustainability

The first major event this year was, as always, Davos, which kicked off on January 15, 2017, in Switzerland.  It has been our experience over the years that Davos sets the tone and agenda for the upcoming world events and focus.  Thus, this year our family office partners in attendance at Davos report that no one was talking much about changing the world's problems.  Instead, the 2017 Davos was focused on a largely pro-business agenda, which we think will be one of the trends this year as the world watches how Brexit, China and the "Trump Trade" plays out around the world.  We also witnessed in March the recent election of Prime Minister Mark Rutte in the Netherlands, the Dutch rejecting Geert Wilders ("The Dutch Trump") Macron in France.  The Dutch race was seen as a test of support for nationalist parties that have been gaining ground across Europe.  Macron and France gave the EU much to be hopeful about in light of the UK upcoming Brexit.

With respect to Davos this year, our family office partners who attended Davos reported the hottest ticket of the event was the dinner hosted by Saudi Aramco, which is about to embark on the world's largest IPO.  Saudi Aramco's event took place at the $175M interContinental Hotel Davos and drew the world's business elite, including the leading Saudi royal family members and business community, HSBC boss Stuart Gulliver, Blackrock boss Larry Fink, Joe Harlan, the vice-chairman of Dow Chemical Co.  Saudi oil minister, Khalid al-Falih, and Saudi Aramco CEO, Amin Nasser.  The Saudis addressed the world's elite, promoting Saudi Aramco's IPO set for the second half of 2018 and discuss the Kingdom's expectation for the $100 billion public offering.  The Saudi Aramco IPO is projected to be four times more than the largest flotation so far, according to Bloomberg.  

Brexit and the fate of the UK economy took at center stage at Davos.  Davos confirmed what Privos has been predicting this year,  namely that London is starting to freak out about a loss of jobs and that over 25 percent of the City's financial services revenue will flee to Paris and Continental Europe.  Lloyds Banking Group, Britain's largest mortgage lender, is looking to relocate to Frankfurt to preserve its ties with the EU, a move unthinkable pre-Brexit.   JPMorgan CEO, Jamie Dimon, predicted that "it looks like there will be more job movement than we hoped for" with England's decision to leave the EU.  

Our family office partners reported that many hedge funds, private equity firms, and banks canceled and scaled back their Davos parties. Standard Chartered Bank, feeling the Brexit woes, backed out as did Bank of America while Barclays and Citigroup held muted events.  However, our Brazilian family offices were happy to report that their favorite Brazilian model Barros was at the McKinsey party while our London partners were happy to see David Cameron at the Belvedere Hotel doing paid appearance for PWC.  As Operation Carwash expands in Brazil, with massive corruption prosecutions underway, Brazilian billionaire certainly were in attendance at Davos.

Next, our family office partners reported that China was certainly pulling out all the stops at Davos with Xi Jinping becoming the first Chinese leader to address the World Economic Forum at the very time.  For cynics at Davos, Xi Jinping's appearance was meant to mitigate the truth that the outflow of Chinese capital has increased in the past couple of years, as a weak Yuan, crack down on corruption, and weak Chinese capital markets spook tycoons and China's elite, who are on a property buying spree in New York, Paris and London.   

Finally, our family office partners at Davos also reported that Soros Fund Management Chairman, George Soros, took the stage to discuss the global markets in light of Trump victory, predicting that Trump will fail and markets will not do well this year.  Soros predicted that America has elected a would-be dictator as president, the European Union is disintegrating, U.K. Prime Minister Theresa May won’t last long as her nation prepares to secede from the EU, and China is poised to become an even more repressive society, the investor told Bloomberg Television’s Francine Lacqua from the World Economic Forum in Davos.  “It is unlikely that Prime Minister May is actually going to remain in power,” Soros said.  She has a divided cabinet and base and Britons are in denial about the economic impact of Brexit, he said.  

Privos Capital 2017 Family Office Outlook:  Trends to Watch

These events and others have changed the world in radical ways for family offices.  Global geo-political realities today are causing family offices to rethink their entire portfolio of power, investments, local and regional engagement.   Trump's stunning victor this past November, together with the fallout from Brexit in which UK household wealth has plummeted by $1.5 trillion as a "direct result" of the vote to leave the EU, has resulted in global capital flowing into the new safe harbors of the United States, or what our firm CEO has coined as "The New American Switzerland."  The appointment of Robert Mueller could mark real change of some sort in Washington, good or bad for the current Trump administration.

International family offices and global investors are pivoting and moving huge sums of capital into the safe harbors of the United States this year. You don't have to look further than at the Singapore sovereign wealth fund, Temasek, who in February 2017 announced the launch of the firm's second office in the States, opening a new investment office in San Francisco to follow up expansions into London, Sao Paulo, Mexico City, and New York three years ago.  

It is ironic that while the Singapore sovereign wealth fund is expanding into California, the world's fifth largest economy, CalPERS, the $300B California pension fund, announced it is whacking private equity GP head count, cutting scores of private equity firms as CalPERS moves to cull its list of private equity firms from its old number of 200 managers to today just 60 mangers with the announced goal of just 20 managers by the year 2020.   Where will these CalPERS GP "road kill" go for new capital, that is the issue being played out in 2017 in our family office world.  The answer, of course, is private equity and hedge funds are all looking to family offices to plug the allocation funding gap.  The collective view, according to Chairman of several private equity firms we know well, is there is no where to look for new capital except global family offices.   Similarly, our family office partners are redeeming en masse from their worst hedge fund managers who are all going under, yet we can report that in 2017 the biggest 309 hedge funds have increasing AUM to $1.88 trillion today.   Thus, for smaller private equity firms and hedge funds in the bottom half of the masses, the buzz is that these fund managers days are numbered.  Many will stop managing third party capital and turn themselves into "family offices."

Doing business successfully in 2017 will look different than in past years.  Our family office partners keep on telling us that the world keeps on getting messier and more complicated for them, with interconnected global risk.  It is getting harder to make money as the instability in the world is growing, yet such uncertainty has created huge opportunities for family offices with capital to deploy around the world.

In 2017, family offices will experienced improved growth but well below pre-crisis levels.  High debt will harm weaker economies.  Inflation will increase following last year's commodity price stabilization.  China's crackdown on corruption and its slowing economy will send more RMBs via Hong Kong to the West, particularly the U.S.  The US Federal Reserve is likely to raise rates. As in recent years, economic growth forecasts were too optimistic at the start of 2016 and had to be lowered. While the recovery in the Eurozone surprised to the upside, a weak start to the year in the USA and a persistent downturn in some emerging markets (EMs) kept growth well below pre-crisis levels.  Thus, Privos predicts 2017 will only bring a slight acceleration of growth for our global family office partners.  The Trump Trade and Brexit will add uncertainty to global growth.

Add to the fact that Obama kicked out Russian diplomats out of the US in his final weeks in office, Russia is bombing Syria and apparently hacking John Podesta's emails, Saudi Arabia is bombing Yemen, the U.S. and its allies are now bombing ISIS in Syria, and Turkey is now sending warplanes to bomb the Kurdistan Workers' Party, or PKK, and Trump is being accused in May 2017 of leaking Israel intelligence secrets to the Russians, we certainly live in a world that has become dangerous and fraught with risk and peril. The geo-political volatility is so extreme that one of our billionaire family office partners who runs a leading hedge fund is actually afraid of hosting dinner parties at his private home in New York City for fear that his guests and investors will think that he has taken his "eye off the ball" socializing instead of focusing on running his hedge fund in these highly volatile markets. 

Today, family offices have witnessed a whole lot of mess in the world.   Family offices have experienced this year alone the fallout from the Panama Papers, rioting in the streets of Istanbul during a failed Presidential Coup attempt in Turkey, Trump at the Republican Convention, Hillary in Philadelphia at the DNC Convention, the recent election in Peru of its new Oxford and Princeton trained economist, Putin pulling out of Syria on March 14, Dilma's impeachment in Brazil led by the PMDB opposition leader, Obama first visit to Cuba on March 20, Mauricio Marci elected the new leader of Argentina and on February 29 announcing a $4.65B settlement with Paul Singer's Elliott Management, Putin invading Ukraine, the U.S., France and Russia teaming up to bomb ISIS in Syria (conveniently forgetting Putin's invasion of Crimea and fomenting rebellion in Ukraine), Macron's win in France and Robert Mueller being appointed Special Prosecutor for the Russian Investigation.

In the past two years, family offices have seen it all.  We have survived the Dow Jones Industrial Average falling 1089 points on August 25, 2015 - the worst intraday drop in financial history, Trump's stunning campaign success in the U.S. Republican primary running up to his actual successful White House run (the "American Brexit"), the out of control situation in Greece (Grexit), the weak growth in China, the new impressive Saudi King Salman bin Abdelaziz Al Saud, Hilliary's email scandal, the earthquake in Napal, the horrific ISIS deaths of the Japanese Yukawa and Goto and the Jordanian pilot Lt. Muath al-Kaseasbeh, the Malaysian Airlines and AirAsia disasters, the Ebola outbreak, Prime Minister Nouri-al-Maliki relinquishing power in Iraq, the advance of the radical Sunni group Islamic State (ISIS) into Iraq, Scotland's near succession from the UK, fighting in the Gaza Strip, the Russian currency crisis, Obama's graying hair,  "Jeb!" failing run for the White House, Cruz and Rubio fighting Trump, Cruz refusing to endorse Trump at the Republican Convention, Russian hacking the DNC servers, the real Snowden and then "Snowden the Movie," American's fracking energy rebirth, the new Trump administration, and the U.S. nuclear deal with Iran - all these global events, and others, serve as a stark reminder these current events are resetting a new world order that is complicated and fraught with risk.  

Trump Sworn in January 20, 2017 - 45th President of the United States - What Does This Mean For Global Family Offices?

In one of most surprising American political turn of events this century, the world was stunned late last year when President Donald J. Trump, a businessman with no political experience, was elected to the White House on November 8, 2016, a once-unimaginable scenario that has plunged the US, its allies, and adversaries into a period of unprecedented uncertainty and instability.   The American version of Brexit, family offices are still trying to digest the impact of American's election.  

Last year, President Obama, a longtime foe of Mr. Trump, and Hillary Clinton, the president-elect’s vanquished opponent, held separate news conferences to urge people to put aside whatever bruised feelings and disappointment they have and come together for the sake of the republic, and for the good of Mr. Trump’s presidency  Mr. Obama, addressing the nation from the Rose Garden, said he had called Mr. Trump with congratulations and to invite him to meet at the White House prior to Trump's swearing in ceremony to discuss a smooth transition to the Trump administration, according to the New York Times.

As Americans, we wish our new President well and the best of success in governing the U.S.  However, the question for family offices is how the Trump presidency will impact their investments, family offices and world-wide holdings.  Before the election, global family offices were positioning their portfolios and investments to take advantage of winners and losers in markets in light of a Trump Presidency.  Now, with Republicans retaining both houses of U.S. Congress, and Trump in the White House, family offices except to see a mass roll back of Obama's policies and legislation.

America:  The New Switzerland

On January 20, 2017, Trump was sworn in as the 45th President of the United States, then, the very next day, the world witnessed a massive women's demonstration to protest the incoming American president.  Demonstrator numbers exceeded the number of people who came to Trump's inauguration swearing in ceremony.   In response to the demonstrations, Trump tweeted on January 22, "Why didn't these people vote?"

Despite the emotional upheaval and angry debate between liberals and conservatives in the United States, the US continues to be the beacon of stability, freedom and economic prosperity in the world, and a economic safe havens for global family offices.   Put another way, the U.S. has become the financial "safe harbor" for the world' global family offices.   Continued capital flight from the world's regions have few choices at the end of the day, with the U.S. being the primary beneficiary of capital inflows.  Further, the Federal Reserve is tapering its unprecedented bond-buying and gunning after companies practicing the art of "inversions."  The price of energy is plunging and the US is becoming a global energy exporter as we have seen with the rise of Cheniere.  There is talk about Trump encouraging a Russian "brain drain" by offering American O-1A and EB-5 visas to Russia's best and brightest, to lure them to the shores of the States ostensibly to create jobs and opportunities for US citizens.  Add to the mix concerns regarding China’s property market, coupled with vigorous debates about its bad debts, and daily CNBC and Bloomberg “breaking news” about the Federal Reserve pullback from its supporting the American and global economy and now ISIS march across Iraq, we are certain that 2017 will be a wild ride for those family offices not prepared for the storm and opportunities associated with uncertain times.  

The Big Picture:  Our View of the World

In 2017, global family offices will experienced it all:  Growth, terror, uncertainty, joy, prosperity, and chaos.   Around the world, family offices have experienced economic growth better than last year's performance with some notable twists and turns.  Overall Europe is doing better, Macro was just elected in France, the Netherlands avoided a difficult election result that lets the EU breathe a sigh of relief; however, Asian, Latin American, and African countries economies have not delivered returns and growth that our family office partners were hoping for last year.  China is slowing and becoming politically punitive, resulting in a massive capital export of currency and talent to the west.  The US has come roaring back from economic uncertainty following the Global Financial Crisis, with America now considered the "New Switzerland."  The Trump trade is causing uncertainty and anxiety in global capital markets.  The US now has a FBI investigation and Robert Mueller leading the Russian investigation.   No matter the results, the Dow Jones plummeted the day of Comey's firing and appointment of Mueller.  Thus, the US is both booming with low unemployment, fracking and LNG exports and - at the same time - held in limbo by the developments in Washington.

In 2017, the IMF expects the world economy overall to expand by 3.6 percent inflation adjusted, up from this year’s estimated 3.1 percent growth. Both advanced and emerging economies contribute to the improvement.  Europe is slated for moderate growth, 1.9 percent measured by GDP. Given the minimal population growth rate for the Continent, this is pretty decent but not booming.  Industrial activity edged down earlier this year but has since recovered most of the lost ground.  In North America, look for growth about in pace with last year’s.  Canada will grow a bit more slowly than the U.S. due to its concentration in oil and other commodities. 

Asia is the wild card for the global economic outlook. China, in particular, is opaque:  we just do not know in the family office world whatis really happening inside the Chinese economy. The official China 2017 growth rate of GDP is 6.9 percent, down from 7.0 in previous quarters, but no one trusts the official Chinese statistics. We know that U.S. exports to China declined in 2016 but have looked better in recent months. Consumers are helping the economy, good news given weak capital spending.  Perhaps the corruption crack down in China is starting to reap benefits.

Elsewhere, Japan has relapsed into recession, though unemployment remains very low. Shrinking population and labor force prevent much growth there. India’s growth remains strong, but capital spending has slackened this year. Consumer spending and low commodity prices are strengths that should enable India to continue its strong expansion.  The commodity-dependent countries, much of Latin America and Africa along with parts of Asia, are facing difficult times. You must appreciate that with commodity prices 30 percent lower than their 2016 peak, driving cutbacks in mining, petroleum and agriculture, Latin American is hurting, big time.  Current price levels are still better than anything seen before last year, but they don’t justify continuation of recent production levels, and certainly not continuation of new project construction, according to Forbes.

SDGs, Climate Change and COP21

As the world struggles with terrorism, it is also attempting to move the needle on climate change and sustainability as we all know well from the recent COP21 in Paris.  Last year at COP21, leaders from 195 countries agreed on the first universal, legally binding deal to cut carbon emissions, in a move that David Cameron said marked "a huge step forward."   Yet, for every step forward, there are painful steps backwards, as the Volkswagen experience shows when the global car manufacturer admitted it had literally installed software on diesel cars that cheated emissions tests in America.   The Trump White House deleting climate change data on Day One speaks volumes about the coming fight this year over climate change, the environment, sustainability.  

We refer you to the SDG section of our website to learn more about the investment philosophy of our firm.

Global Instability

Yet, despite the positivity of COP21, today the world is actually the most dangerous that family offices have seen it in decades.  Look at the current reality.  The regional struggle between Iran and Saudi Arabia took a step in an even more dangerous direction when last year Saudi Arabia, a Sunni monarchy, executed the outspoken Shite cleric, Sheikh Nimr al-Nimr, provoking the supreme leader of Iran, a country ruled by Shite clerics, to seek "divine vengeance" for the killing.  France is at war with ISIS.  Russia is bombing ISIS as a cover to propping up the Syrian chemical weapons despot, Bashar al- Assad, one of Putin's few international allies.  Turkey is targeting both ISIS and the Kurdish PKK.   The Islamic Estate extended its base beyond its base in Iraq and Syria, knocking on Turkish border.   Graphic images of ISIS burning alive a Jordanian pilot, beheading 21 Egyptian Coptic Christians, and looting a heritage site in Syria and killing the 82 year old head of antiquities at Palmyra, flashed across the 24/7 news media a while back.

As a result of the West's failure to defeat ISIS, our family office partners in Europe report on the worst refugee crisis since the Balkan wars.  The conflict in Syria continues to be by far the biggest driver of the migration; however, the violence in Afghanistan, abuses in Eritrea, and poverty in Kosovo are driving factors as people look for new lives in Europe.

Immigration Crisis

Last year, the International Organization for Migration (IOM) disclosed that Europe has witnessed a surge of more than one million migrants and refugees crossing into their borders by land and sea.  Refugees are mostly entering Europe via the six EU nations of Greece, Bulgaria, Italy, Spain, Malta, and Cyprus.   The EU statistics agency Eurostat reports that more than 942,000 people arriving in Europe have officially claimed asylum. Germany has received the highest number of new asylum applications; however, more than one million have been counted in Germany's "EASY' system for counting and distributing people before they make asylum claims.   We have all seen the German press about the country's immigration crisis.   Family offices are keeping careful tabs on European's immigration crisis as it impact their holdings and assets from Paris to London.

Hollywood:  The 88th Annual Academy Awards and The Star Wars Effect

Amid the chaos of the world, Hollywood and its global film, gaming, music, and new media business continues to defy expectations as it turns out billions of global revenue and leads the world in the entertainment industry.

Last year, on February 28, 2016, the 88th annual Academy Awards named Spotlight the best picture of the year and best original screenplay, a film which recounts journalistic efforts to expose child abuse in the Catholic Church.  Separately, George Miller’s apocalyptic Mad Max: Fury Road swept through the crafts categories, winning six awards; The Revenant, Alejandro G. Inarritu’s cinematically stunning survival tale, then moved to the fore, claiming the awards for best cinematography, directing and actor, which went to Leonardo DiCaprio who spoke passionately during his acceptance speech about the environment noting that 2015 was the hottest year in recorded history.  “Climate change is real,” said DiCaprio. “It is happening right now. It is the most urgent threat facing our entire species, and we need to work collectively together and stop procrastinating. We need to support leaders around the world who do not speak for the big polluters or the big corporations, but who speak for all of humanity, for the indigenous people of the world, for the billions and billions of underprivileged people who will be most affected by this, for our children’s children, and for those people out there whose voices have been drowned out by the politics of greed. I thank you all for this amazing award tonight. Let us not take this planet for granted. I do not take tonight for granted."

Reflecting on the 88th Academy Awards, Privos, as a global business, has witnessed the explosion of Hollywood and increased escapism, as more people temporarily depart their day-to-day reality by simply going to the movies.  In December 2015, Hollywood made history with the release of Star Wars: The Force Awakens, J.J. Abrams' block buster.  Star Wars beat all records hauling in $238 million in North American, with a global launch of $517 million in the first weekend release of the movie.  In 2016, the film, with a $200MM production budget, will return gross sales in excess of two billion dollars, if you can fathom that success.  TWO BILLION.   Hollywood and New Media is one of America's key exports, and growing, which is a testament to the staying power and creativity of Hollywood and the world's thirst for entertainment and new media. Privos Entertainment, based in Los Angeles, is enjoying the global success of Hollywood and new media with our international family office partners who allocate to entertainment, film, gaming, music, and new media.

The Greek Experience

We think there has been enough written about the Greek disaster for all of us.   What a colossal embarrassment for the proud people of Greece. Germany has lost one notch of the world's respect as well, which isn't good for their impeccable business community.  In Greece, one of our family office partners who was vacationing last summer with his family on his island reports that he had been spending hours each day trying to take a 60 Euro cash advance from each of his U.S. credit cards; he could not FEDEX any currency into the country, and he was concerned that might become stuck with his wife and children at the Athens airport given the massive chaos that had pervaded the country.  How Greece survives in 2017 will be a beacon of things to come in Europe, and we will watch the situation unfold carefully.  We are concerned about Italy, naturally.

Investment in Africa

Privos is investing actively in Africa.  We believe Africa represents one of the best, long term, investment opportunities to allocate capital across a wide range of industries.  Investing in Africa is not for the faint at heart; it takes incredible focus, connectivity, and commitment to get it right.  But what family offices see in Africa is an opportunity to enjoy 10-20x, private equity like returns, if you can effectively manage the "Africa risk."  By way of example, one of our family office partners won an African timber tender, built a timber processing plant in Africa, exported wood from the continent to Europe and into the hands of the hungry IKEA like manufacturers, then sold his African entire timber operation to a private equity pregnant with ESG LP capital for a 10x exit multiple.   As our partners told our CEO, "where in the world can you do that today except Africa"   

Turning to the current eco-system of Africa, lat year, we witnessed over 50 African leaders and heads of state fly into Washington D.C. last year to attend the U.S. Africa Leaders Summit with Ebola keeping several leaders at home to tend to the crisis.  Family offices are also feeling the brunt of the Turkish lira has taken a bath in light of the corruption allegations.  

Africa is the new Silicon Valley for global family offices despite the Ebola situation that had reached critical mass.  Today, we have more international family office partners doubling down on Africa, taking advantage of the massive opportunity the continent has to offer.  Direct deals are the rage in Africa with huge exits to private equity GPs who are hunting the continent for yield.  GE Capital announced at the firm will invest about $2 billion in Africa by 2018 and double its local workforce, with Jeffrey Immelt calling the continent one of the world's most-promising markets.  “Africa is one of the most important growth areas, purely from an economic standpoint,”GE Chairman Immelt said at a media event for the start of the U.S.-Africa Leaders Summit in Washington being hosted by President Barack Obama. “It’s early. It’s in very early days for Africa, so there’s still a lot yet to be done and the notion of having the summit here says that it’s important.” According to Businessweek, GE won about $8.3 billion in orders in Africa recently as it accelerates operations in a continent where Immelt said sales were “almost zero” in 2000.  GE Africa revenue there last year was $5.2 billion, according to GE, which estimates that Africa’s basic infrastructure needs could generate $90 billion in investment opportunities.

Investors smart about Africa all know about GE's foray into the continent; however, what family offices in Africa see that no one else does is that when the GE's of the world invests billions in their country, city, businesses in Africa, they are creating a massive liquidity event for leading family offices in Africa.  It is no wonder that you see in clubs in Washington D.C. African students from leading local universities spending "$10,000 per night clubbing in Georgetown," as reported in the local media.  

Adding to the capital expenditures in Africa, shockwaves were felt in Johannesburg and Cape Town recently when it was reported that Nigeria, a country of 170 million people, recently surpassed South Africa as the largest economy on the continent, with the capital Abuja reporting a whopping $510 billion gross domestic product for the African nation, blowing by South Africa's $384.3 billion figure.   Put another way, Nigeria, a major oil and gas producing state, is now the 26th-largest economy in the world; Moody's has forecasted exponential growth for the country to $4.5 trillion by 2050, which will elevate the country to one of the largest 15 countries by that time, rivaling top European countries like Holland. With growth comes deal flow, with Marriott International recently announcing, for example, that it is expanding its hotel business in Nigeria with new luxury hotels in Lagos, Nigeria's commercial capital.  Of course, there is debate about how Ebola will play into Africa's expansion, but the consensus in our African partners seems to be that Ebloa will result in a slight economic slowdown that over the next 36 months will be a tragic but contained crisis.

Certainly, there are many moving parts in the global economy for a family office to process and make sense of in 2017. Thus, iIn light of the world-wide economic reality, what should a family office do in to achieve its business, capital and strategic objective?  That is the question on everyone’s mind this year.

Brexit - UK's $2 Trillion Loss

Shockingly, the world watched last year in utter amazement last year that for the first time in 700 years, Scotland nearly succeeded from England. No one really talks about this stunning turn of events anymore; the British media is now focused on Brexit and the new royal baby; however, Scotland leaving the U.K. is a massive embarrassment for the English, with the British Government left scrambling to keep the country in tact as its leaders failed to appreciate the Scots distain of the UK parliament.  Behind the scenes, Scottish succession resulted in family offices selling shares of Scottish companies and placing bearish bets on the British pound.  The widespread implications of the Scotland split-off has certainly further damaged the UK - and London - as a world class player on the global stage.

While our London family office partners are reporting seeing less Russian’s “bling” at Lou Lou’s and other high end clubs in London due to the ruble hitting new lows against the euro, and the current price of oil crisis, England has been damages on the world stage by the Scotland crisis. To make matters worse, Brexit has caused damage to almost every sector of the British economy, including energy, retail, financial services, and manufacturing according to a report commissioned by an alliance of Conservative, Labor and Liberal Democrat politicians trying to stop a hard Brexit.  Theresa May's government is expected to trigger article 50 and the beginning of the Brexit process while Marine Le Pen is trying for her own French Brexit on May 7, 2017 to secure the French presidency.  

Family Office Wealth in Asia

Turing to Asia, according the Deutsch Bank, China is adding the GDP of Germany "every three and a half years" which, if you think about it, is the justification any family office needs to expand their portfolio companies, funds, foundations and holdings into the Chinese mainland.  Then there is Singapore; according to Jim Rogers, George Soros' former hedge fund partner, "Singapore is becoming the new Switzerland as its sits right next to China and has been helped by problems with offshore havens like Switzerland and Cyprus. It will be the fastest growing money center in the next 10 years."  

According to Forbes, the number of Asian billionaires has soared; the region has a record 444 members of the New 2016 Forbes Billionaires List, led by three entrepreneurs from Hong Kong:  Li Ka-Shing, Lui Che Woo, and Lee Shau Kee.  Rather than Japan as the focus of attention, mainland China is out in front with a record 152 billionaire members.  Shockingly, China was not represented on the Forbes list back in 1996.   We do not need to discuss the Alibabi IPO and the massive wealth that has been covered extensively in the media.  Accordingly, any global family office looking to enter the world economy must engage China, Japan, South Korea, KL, and Singapore in a big way or risk becoming irrelevant in the world order.

The world economic forecast for 2017 looks stable albeit subdued, with there are both huge land mines and massive unique opportunities lurking beneath the surface.  Recent meetings at the International Monetary Fund called for a coordinated plan to boost world-wide growth potential. Advanced economies are recovering at a stronger pace than emerging markets and are forecasted to outperform their emerging cousins this year.   However, global growth is still below the levels in the immediate post-crisis period and in the long upswing before the global recession of 2008-09.  And, we know that Putin ordering his troops over the border into Ukraine and the collapse of the Russian currency are causing the markets to go wild and Russian consumers freaking out and canceling Swiss ski vacations, another possible risk factor to consider.

Japan

In 2017, Japan is "at play" in the family office world.  Many family offices are putting their resources into Japan.  Private equity is effectively doubling down on Japan.   The country, for years the world’s second largest economy, last year witnessed a growth rate of 1.7% together with the birth of the recently re-elected Abe and his “Abenomics,” which today is showing success in boosting inflation expectations.  If Japan can manage its tax rise and long-lasting structural reforms, you could see a leading economic giant come roaring to life next year, as many of our Japanese family office partner predict.  Whatever the case,  Japan is getting much attention this coming year.

China

China and the Eurozone, however, are causing our family offices much stress and uncertainty.  Take China, for instance, with 7.7% growth rate last year but a nationwide crack down on graft and bribery has sent the economic tumbling and massive capital flight as China's leading family offices continue to look for external opportunities abroad, particularly in Europe and the U.S.  The Chinese economy today is clearly slowing down as authorities are debating stoking another credit-fueled investment boom and risking a rapid slowdown in growth.   Yet, our Chinese family offices, their funds and portfolio companies are experiencing the type of go-fast growth that is truly the envy of the developed world.  For Europe, the Eurozone remains a challenge, with negative growth of -0.4% last year alone.  While the consensus is that Europe is no longer in intensive care following the credit crisis, it still has chronic problems to fix in its economy.  Growth prospects are exceptionally weak, inflation extremely low, and the European Central Bank has been less interventionist than its global peers, much to the dismay Europe’s highly educated albeit unemployed labor force.   

2017 Latin America Forecast:  Watch Panama, Argentina, Peru, Columbia, and Chile

We predict that all the "action" in Latin America in 2017 will be found "West of the Andes" in rising economic regional powerhouses Chile, Peru, Panama, and Columbia.  These countries form the growth engines of Latin America, albeit only at 2-3% due to the application of a modest amount of monetary and fiscal stimulus.  Currency depreciations West of the Andes should eventually pave the way for recovery in 2017; however, interest rates are on the rise in these regions. 

The story in Latin American today starts with the slowing of China.  China's slowdown has decimated commodity prices in Latin America and with them exports and investments in South America.  Brazil and Venezuela keep on spending after the commodity boom began to fall and both countries today are suffering and on the verse of civil unrest.   From the Panama Canal north, the region's economies are tied much more closely to the United States than China.  Mexico, Central America, and the Caribbean are net commodity importers and will hold steady in 2017, but in a most unspectacular fashion, according to The Economist.   

Most of Latin America's currencies and stock markets have suffered a beating. The region will contract slightly in 2017, something that has not happened since 1967.   With emerging markets around the world heading south, Latin America will fare no better in dealing with China's slowdown and rising interest rates in the U.S.   Recovery depends, too, on a return of confidence. Chile has closed its current-account gap, but investment remains weak because of political uncertainty. Most forecasters expect Brazil to pick up towards the end of next year after the Olympic games, but that requires a credible fiscal squeeze. Having borrowed to finance expansion in the good times, many Latin American firms must retrench too. The IMF finds that the ratio of debt to equity in a sample of 450 non-financial companies in five of the region’s bigger economies has risen to 6.5, from four in 2011.

Our family office partners in Latin America report that the continent is for the most part taking a hard "left" turn, as witnessed by the recent re-election of Bolivian President Evo Morales, South America's longest serving leader.  Morales, 55, an outspoken critic of neoliberal economics and US policies, will remain in office until 2020, but not past 2025 as he lost the February 21, 2016 referendum allowing him to run for another five year term.  Morales counts among his close friends and supports the late Fidel Castro, Brazil's former President Luiz Inacio da Silva and the late Presidents Huge Chavez of Venezuela, and Nestor Kirchner of Argentina.  Bolivia with its rich resources and captive markets for natural gas exports to Brazil and Argentina is posed to become more of a regional economic player in Latin American in 2017.  Our family office partners in Latin America report that Bolivia may be one of the surprise economies in the region to watch this coming year.  

Chile

Chile's President Bachelet, a Socialist pediatrician, raising the corporate tax rate over the howls of protest from local businessmen.  According to Bloomberg,  Chile´s central bank forecast slower growth and faster inflation than previously estimated for this year, highlighting the dilemma facing a country with the most expansive monetary policy in the Americas.  

In 2017, Bachelet will continue to push through an ambitious package of reforms during her second term in office, including changes to the tax code to pay for improvements to education and a restructuring of the electoral system.  However, many of the president's reforms have stalled, as weak economic growth has drained public resources and corruption scandals have dragged her approval rating to an all time low.  

Today, Chile is struggling with the slowdown of China in profound ways despite being a world leading exporter of copper.  Gross domestic product will rise 2 percent to 2.5 percent, compared with a previous estimate of 2.25 percent to 3.25 percent, the bank said in its quarterly monetary policy report.  The inflation forecast was raised to 4.6 percent from 3.4 percent.  Policy makers discussed the possibility of raising interest rates last month for the first time since May 2012 as inflation remained above the target range for a 16th month.

Chile currently has the lowest real interest rates in the Americas as the central bank tries to revive growth in an economy hit by a slump in copper prices. Investment will fall 1.2 percent in 2017, compared with the previous estimate for an increase of 0.7 percent, policy makers said. In 2017, investment will rise 1.9 percent.  The central bank has kept its benchmark rate at 3 percent since October 2014. The rate is 1.6 percentage points below inflation, compared with 0.3 point in Peru and close to zero in Colombia. In Mexico, the key rate is 0.3 point above inflation and in Brazil the differential is 4.7 points.

A New Powerful Argentina:  A New President, Hedge Fund Settlement, and the Awakening of A Sleeping Giant in 2017

Despite the recent election, Argentina has been faltering, but our family office partners there report for the first time in nearly two decades the country is experiencing pride and hope they can overtake the Brazilians up north.  

First, on February 29, 2016, Bloomberg announced that Argentina and a group of holdout creditors have agreed in principal to bring an end to a 15-year legal dispute over defaulted debt.  Argentina will pay a group of litigants led by Paul Singer’s Elliott Management $4.65 billion, or about 75 percent of their full judgments including principal and interest, according to a statement by Daniel Pollack, the court-appointed mediator. The funds, which also include Aurelius Capital Management, Davidson Kempner and Bracebridge Capital, will also receive a payment to settle claims outside New York District court and for certain legal fees and expenses incurred during the dispute.  

On the surface, the country's failure to complete a debt coupon payment which triggered the second default in the past 12 years. The country has been litigating in New York for years against the hedge fund holdouts which is creating a situation in which Argentina, led by former President Cristina Fernandez de Kirchner, opted to default on billions of dollars of bonds, thereby plunging Argentina into further economic chaos. However, in February 2016 Argentina struck a deal to pay $1.35 billion to a a group of Italian investors whose bonds the country defaulted on in 2001.  Privos predicted correctly in 2015 that a global settlement will happen, paving the way for Argentina to re-enter the global capital markets. 

Then the world watched the election of center-right Presidential candidate, Mauricio Marci, who displaced Cristina Fernandez de Kirchner, thus making Argentina open again for business.  Marci’s coalition, Cambiemos or “Let’s Change,” resulted in Pampa Energia, Banco Hipoteario and the state-backed oil company, YPF, increased borrowing and activity in the local market.

President Macri lost not time in making respected cabinet appointments:  Alfonso Prat-Gay as finance minister, Federico Sturzenegger, as president of the central bank, and Luis Caputo as secretary of finance.  These three men, standing together, will take Argentina back to the height of power and influence in Latin America, according to our Argentinian family office partners reporting to us from Buenos Aires, Mendoza and elsewhere in the country.  International family offices who are invested in Argentina, particularly our UK and European family offices with vast vineyard and agricultural holdings in the country, are doubling down and now expanding their land purchases with the arrival of Marci and his new administration. 

That being said, fewer of our family office partners are heading to BA and Mendoza for the holidays; how can that be good for the country?  The result for the people of Argentina has been economic turmoil.  Our family offices in Buenos Aires and Mendoza report that the government has restricted the amount of dollars available to importers and is clamping down on foreign goods.  Shops are closing and retailers are reporting empty shelves. The practical result, which no one is talking about, is that Argentina family offices, like their counterparts in Brazil, are participating in a massive capital flight overseas.  Swiss asset managers are quietly opening offices in Montevideo, the so called "Geneva of Latin America" to take advantage of the financial pressures happening to the Argentina's ruling elite.  Its the like the days of the Rohm Brothers all over again. However, with the recent election of Mauricio Marci, the hedge fund "holdouts" are starting the process, again, of settling their decade-long debt dispute with Argentina.

In 2017, Marci will continue transforming the Argentina economy creating huge new opportunity for family office investors world-wide.  Inflation is coming down and Argentina is continuing its re-emergency as a South American economic powerhouse, taking advantage of the missteps in Brazil.  

Impeachment and Financial Crisis in Brazil

On September 1, 2016, Brazil's Senate voted to remove President Dilma Rousseff from office for manipulating the budget.  It puts an end to the 13 years in power of her left-wing Workers' Party.  Ms. Rousseff had denied the charges, but with 61 senators voting in favor of her dismissal and 20 against, her rein was over.  Michael Temer was sworn into as president and will serve our Ms. Rousseff's term until January 1, 2019.

In October 2017, Brazilian federal Judge Sérgio Moro on Monday said the Car Wash probe, Brazil's largest ever corruption investigation, is nearing completion in the southern city of Curitiba, where it started in 2014.

Economists have lowered their 2017 GDP forecast for Brazil to a 3.22 percent contraction.  That, combined with last year's 3.8 percent fall, would be Brazil's worst two-year recession on record dating back more than a century, according to Ipea.   This year, Brazil's economy will remain feeble and the road to recovery will be long and painful.  Unemployment is rising to crisis levels, despite the economic bump from the Olympics in Rio and the World Cup.  Political uncertainty and a massive number of scandals have engulfed the government and led to scores of resignations. The country has seen large protests in recent weeks and the new President Michel Temer’s loss of support bodes poorly for the passing tough reforms next year.

Many local family office LPs blame President Dilma Rousseff impeached less for budget related fraud but being caused, in the end, from the fall out from Petrobras related corruption under her watch.  In addition to the impeachment scandal, the country is facing the Zika virus crisis following the Olympics, huge unemployment, massive liquidity crisis, a current recession.  Add to the mix the fact that inflation is up and the real is at a 12-year low, plummeting 23% against the dollar.  Capital flight has skyrocketed; why do you think the Brazilian bank Itau is enjoying 27% growth at their private bank in Zurich, Switzerland that is going head-to-head of Pictet, Lombier Odier and Quilvest for Latin American billionaire capital? 

Mining giants such as Brazil's Vale SA and U.K.-based Anglo American PLC are taking advantage of the political instability in Brazil, increasing their efforts to extract minerals from Brazil's Amazon rain forest, a high-stakes foray into one of the world's most remote and environmentally sensitive regions.  Our family office partners also report that the huge infrastructure spending in Brazil for stadiums that hosted the World Cup 2014 and the 2016 Olympic Games, while benefitting a handful of Brazilian family offices.  

Brazilian hedge funds and private equity funds are facing investment challenges for actual and prospective investors in terms of the legal, regulatory, cultural and microeconomic environment, according to a recent study by INSEAD and PWC.  In fact, according to the influential Emerging Markets Private Equity Association (EMPEA), total PE investments in Brazil are down to US $4.6 billion, representing 69% of the Latin American PE industry, the most attract emerging market for private equity investments.  It's no wonder that the "action" that our Brazilian family offices partners are calling us, screaming for us to invest as "Brazil is on sale."  

Latin American Transformation

In Latin America, there is a massive shift of wealth and power that family offices are leading post credit crisis.  The huge news is that Columbia will later this year become the third-strongest economy in the western hemisphere, overtaking troubled Argentina that is experiencing soaring inflation, weak currency, horrific economic growth, and questionable global leadership led by its president Cristina Fernandez who is under criminal investigation.  Furthermore, Latin America family offices are witnessing the new age of transparency and rejection of cronyism.  For example, Panamanians, enjoying one of the fastest-growing economies in the world, just elected Juan Carlos Varela as the new president-elect.  Mr. Varela, a well-known politico whose family owns the country’s biggest liquor producer, campaigned against growing corruption and promises for a more transparent government.  The Panama election, in which the country's former leadership built the first subway systems in Latin America, managed a $5.2 billion expansion of the Panama canal, and attracted massive global corporates, mattered little to the voters who rejected old world Latin America political ways of the past in favor of a new transparency.

Despite the political uncertainly, we believe that during the next two years, in 2017 to 2018, Latin America will be on the best regions for family offices to invest in the world.  Peru is on fire, family offices have been exiting agricultural and mining deals, enjoying massive new wealth, investing in the region and moving their capital to Miami and New York.  One of our partners called from Brazil excited about their development of a Four Seasons-like brand; they have obtained the land at "prices we have not seen in 40 years ago," they reported.  Argentina is "on sale" ad represents one of the best investment opportunities in the world.  Panama and the expansion of the new Panama Canal is spuring massive economic growth in the Central American country.  Contrary to what is reported in the media and financial press, our Latin America family office partners are enjoying huge wealth and moving their money into the U.S. in record numbers, despite the fact that the world thinks Brazil is blowing up and Latin America is taking a political hard turn left.   What is happening today in Latin America is yet another example of how family offices have a unique view and pulse on local markets that are often overlooked by the financial world.

Hedge Funds and Alternatives

Family offices have seen hedge funds shutter their doors en masse.  

Hedge funds overall are under pressure. As many are finding it quite difficult to raise money. A percentage of these hedge funds are focusing their capital raising efforts on the wealthy and family offices or other strategies to attracting family office capital. For hedge funds focusing on the wealthy, private placement life insurance (PPLI) can prove quite advantageous, according to Forbes.   According to former hedge fund manager and Privos friend, Pete Sasaki:  “The rich and more so the super-rich are increasingly gravitating to PPLI. So long as there are taxes on investment performance, PPLI combined with a successful hedge fund can many times produce better results."  Single-family offices, for example, continue to invest in hedge funds. Many of them are willing to invest substantial sums with smaller nimble hedge funds.   This is a trend that we see continuing this coming year.

In 2017, hedge fund managers are concerned about artificial intelligence, cloud-based platforms that increase mobility, and data governance, according to new data gathered during alternative asset technology specialist Indus Valley Partners' annual Mind Meld Hedge Fund Forum held in late April.

Conclusion

The world watched stunned on January 20, 2017 as Trump moved into the White House.  Whatever your political views, you cannot dispute that the world has changed with the new American administration in ways that we will all see unfold in the months ahead.  As a global business with American leadership, Privos wishes our new President and his administration well.   We also hope those Hillary supporters can unite and continue to improve the US as we are all Americans living under one tent.   Whether you voted for Trump, voted for Hillary, participated in the woman's march on Washington on January 21, or not, we are all Americans.  As Americans, we live today with the unacceptable reality of poverty in Appalachia, murders in Chicago, environmental and climate change crisis, nationwide suffering and unemployment, unacceptable intolerance towards our American Muslims and Latino citizens, crumbling infrastructure (LAX is a national embarrassment), and attacks against our country.

At Privos, it is our view that in 2017 family office investors will experience both an upheaval in certain emerging markets and, conversely, a huge boom in select BRICS, N-11, and select Frontier markets, particularly those countries that have worked hard in the past to improve their economic policies.  Thus, betting on the right emerging market "horse" will be critical.   Thus, family offices that pick the right countries to focus their investment and energies will come out ahead this year, leaving those others LPs who follow the herd mentality.

Today, Privos estimates that the largest amount of global private wealth, approximately $65 trillion, is concentrated in the United States.  In the US, the largest concentration of family office wealth is based in just three areas of the country:  first place New York City, followed by #2 San Francisco Bay Area (including Silicon Valley) and #3 Los Angeles.  In contrast, we calculate Western European wealth stands at $45 trillion with Asia Pacific standing at $40 trillion US dollars respectively.  However, China and Asia Pacific wealth will surpass the US in 2020, a mere three years from today.  If you believe that wealth equates to power, China and Asia will have more capital and wealth than the United States and Europe by the end of Trump's first term.  According to Fortune, even with concerns over its economy, China has already surpassed the US in one wealth indicator:  the number of billionaires within its borders.  A survey conducted by the Hurun Report says that China now has 596 billionaires, surpassing the US talley for the first time (US has 537 billionaires, according to the report).  If 119 billionaires from Hong Kong, Taiwan, and Macao are added, Greater China owns 175 billionaires in the Hurun Global Rich List.  Chinese billionaire Wang Jianlin of the Wanga Group, a conglomerate with investments in cinema chains and hotels, tops the list with $34.4 billion, just beating out runner-up Jack Ma, Chairman of Alibaba.  

What is the significance of this wealth data for our firm other global family offices?

In our view,  family offices in 2017 will witness the Brexit fallout, the Trump Trade, and the Eurozone crisis as smart investors leave the emerging markets, Europe and the UK for the safe harbor of US markets.  International family offices are now pulling cash out of global stocks and into lower-risk bonds and U.S. equities.  In addition, we are seeing an increase in our family office partners this year allocating more to funds and investing in direct deals world-wide across a wide range of sectors, including media (TMT), technology, film, alternative energy, oil and gas, food and agriculture, consumer goods, life science, healthcare, financials, and real estate.  We predict that the fund of funds model of investing will see a revival with increasing allocations from family offices, particularly in hedge funds and private equity.

The big story in 2017 in the family office world will be that the US will continued the trend of become the "safe haven" for capital flight; if you are a Chinese family office, buying a $40 million condo at the Time Warner Center in Manhattan may seem like a "bling move," yet the fact it is smart estate planning as the Chinese government starts to claw back billionaire's wealth from the Mainland.   Our family office partners would rather, in the end, have their money in the U.S. than in tempermental and risky post-Brexit UK and Europe, even despite the US tax code issues.   Thus, we are seeing for really the first time since the global crisis that the U.S. is becoming more more of a safe harbor for international family offices than at any time since the credit crisis.  Our people report a huge uptick in foreign or non-U.S. family offices looking for investment opportunities in the States, whether direct, co-invests, fund allocations or philanthropic activities.  We are seeing a surge in interest and global inquires every week from international family offices looking for investment opportunities in the United States and opportunities to partner with U.S. single and multi-family offices.

Yet, despite the uncertainty in the global financial markets, family offices, their funds, and portfolio companies, have historically amassed massive wealth “doubling down” and going against the grain of popular opinion of the 24/7 financial media.  Thus, we are already seeing this year increased appetite and family office investment activities in private equity, hedge funds, secondaries, and, indirect and direct investments, across all asset classes world wide.  For instnace, Brazil and Argentina is "on sale" and more family offices are looking for opportunities where others are afraid "to hunt."  

Further, with inbound investment from global family offices into the US is at an all time high, our family office meetings, which would rarely take place in the States in the past, are now being scheduled all over the US, with our international family office partners flying in to the States to take meetings in New York, Boston, Philadelphia (with its new Qatar Airlines Doha/Philly flight), Washington D.C., Atlanta, Dallas, Houston, Denver, Chicago, Indianapolis, Salt Lake City, Reno/Tahoe, Elko, Seattle, Portland, San Francisco, Orange County, and San Diego.  An an American led firm, we are encouraged by the renewed interest in the US as a safe harbor for international capital.

Globally, our family offices partner are also paying increasing attention to the Latin American countries (as discussed above) with those countries “West of the Andes” such as Peru, Columbia, and Panama (but pulling back from Chile with its newly elected leftist, anti-business leader) getting the most attention.   In addition, Hong Kong, Singapore, South Korea, with its numerous progressive free-trade agreements, and Mexico, with its recent gutsy pro-business move to open up its energy industry to foreign investment, are attracting family office attention this year.  

Privos Capital 2017 List of Best Global Markets for Family Offices

We are proud to announce our annual 2017 List of Best Global Markets for Family Offices, which includes the following countries that we believe present the best opportunities for family office investments this coming year, as follows:

Privos Capital 2017 Top Emerging Market Pics:  China, Taiwan, Mauritius, South Africa, Cameroon, Brazil, Ecuador, Panama, Peru, Argentina, Columbia, Poland, Qatar, Kuwait, Saudi Arabia, Bahrain, Oman, Jordan, India, and Malaysia.

Privos Capital 2017 Top Western Market Pics:  US, Switzerland, Germany, Canada, Netherlands, Sweden, Finland, Norway, Australia, New Zealand, Singapore, Hong Kong, Iceland, Belgium, Israel, Japan, Ireland, Luxembourg, and Portugal