After a stable year 2020 despite the coronavirus crisis, large French fortunes reinvested massively in the financial markets last year.
Investments by very wealthy taxpayers increased by 29% in 2021, according to data collected by the French Family Office Association (AFFO), which represents French wealth management structures dedicated to ultra-wealthy families.
According to this annual barometer, produced by OpinionWay, the awareness of the very wealthy about the transmission of their heritage was amplified in 2021 (70% against 59% in 2020), as was the protection of their family (61% against 59% in 2020) while the impact of Covid on their investment choices was logically less marked than in 2020.
In a very different market environment, it was above all low interest rates, central bank policy, but also inflation and the high valuation of listed assets that mainly guided their arbitrages.
Growth of listed shares
As for the vehicles favored by wealthy savers, the appetite for listed shares remains dominant (25% of investments), up 5 points, followed by private equity (19%, down one point compared to 2020 ) and investment property (18%, stable).
Life insurance and cash remain stable with 12% and 11% respectively. Other tangible assets remained stable at 4%. Listed debt, unlisted debt, alternative funds lose two points, philanthropy loses one point, and art remains stable.
Driven by their spectacular valuation last year, cryptocurrencies are making their entrance and represent 1% of investments, indicates the barometer.
Decline in “cautious” profiles
Regarding investor profiles, the AFFO barometer shows that in 2021, the “balanced” return to the level of 2019 and represent 64% of investors, up eight points compared to 2020.
Cautious profiles, which had jumped 5% in 2020 in the context of the health crisis and high market volatility, lost ground (13%, minus 10%). Dynamic profiles remain stable (16%), while attacking profiles are up 2% (7%), approaching the level recorded in 2019 (11%).
As for the year 2022, the AFFO refuses for the moment to share any projection: “ The recent evolution of the political context and its impacts on the economy and global finance render the results of the survey on family investments, carried out between January and March 2022, unusable. »
And 2022?
The Russian invasion of Ukraine at the end of February, combined with higher-than-expected inflation, made the outlook for the behavior of wealthy investors tricky.
Prudence undoubtedly dominated the asset allocation choices of many of them over this first part of the year, as suggested by the behavior of savers using wealth management advisers – a category of affluent investors, but not necessarily ultra-rich – who favored low-risk arbitrages in the 1st quarter.
According to the broker Nortia, the gross collection in life insurance operated by their wealth management advisors over this period was thus mainly placed on funds in euros to the detriment of units of account. Always attractive in times of crisis, (investment) real estate has also held up well. And if the volumes on securities accounts remained dynamic, UCITS fell by 25%, regardless of the asset class: CGPs remained wait-and-see by leaving more cash in cash accounts or favored products structured to better “control” market volatility.