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Road Report Highlights - The Lombard Odier UHNW APAC Report

Firm: Lombard Odier

Author: Not noted

Lombard has an affiliate agreement with JBWere in Australis so this report has a better domestic flavour than most. They are concentrating on the UHNW market here which is helpful from a trends perspective but has the added cloudiness adviser driven decisions and notoriously reactive short term investor.

If anything, this report does provide some insights into the changing "defensive" asset that classically for this cohort was a move into enhanced cash or fixed income. They are now re-investing in their own business or alternatives such as private markets.

Elements of the report such as "top risks" don't really provide much in the was of indicators as they are very much a timing issue and are determined by aspects such as their personal leverage etc. The more interesting aspects are charts showing what they are most worried about. Not because it's an indicator of future behaviour but the number of people that don't understand their own portfolio's total risk, their lack of liquidity and diversification - all things that should be noted before the proverbial shit hits the fan, not after.

Geographically, it's also worth noting the change in allocation to alternatives, as note in the below chart.

Almost all respondents in Australia were either maintaining or increasing their allocation to alts, including PE and Real Estate which I guess makes sense if you think of their love for property assets. I would be more interested in looking under the PE vs RE mix for alternatives and the type of PE they are investing in.

Lombard has a nice overview on page 22 of the report that delves into the drivers of returns in the private assets space and how much of diversifier they are when all markets seem to be capitulating on higher inflation and the cost of capital.

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