By Carolyn Cohn

LONDON (Reuters) – The world’s richest families are worried about the U.S.-China trade spat, Brexit, populism and climate change and are keeping more of their money in cash, according to a survey of family offices by the world’s largest wealth manager.

Forty-two percent of family offices – set up to manage the wealth of one or more rich families – have increased their cash piles this year, according to the survey of 360 family offices by Swiss bank UBS (S:) and Campden Wealth Research.

Total cash reserves were 7.6% of family office investments in 2019, up 70 basis points from a year earlier.

Fifty-five percent of family office executives expect recession to begin by next year, 63% believe Brexit is negative for Britain as an investment destination in the long term and 84% think populism will not fade by next year.

“Family offices are taking a dim view of geopolitical events,” Sara Ferrari (NYSE:), head of UBS’ Global Family Office Group, told Reuters.

Fifty-three percent of family offices see climate change as the single greatest threat to the world, with newer generations running the family money putting sustainable investing high on the agenda, the survey said.

Family offices’ views did not necessarily differ from those of institutional investors – pension funds, insurers and sovereign wealth funds – or of the asset managers who help invest their money, Ferrari said.

But family offices had more flexibility in their investments, were less tied to specific benchmark indices and tended to invest more in illiquid long-term assets, she said.

Private equity was the second largest investment class in 2019 behind developed market equities. Family offices said they plan to focus more on private equity next year – buying stakes in unlisted companies or the funds which invest in those companies – with a particular interest in technology firms.

Direct private equity investment achieved the best returns for the families this year, at 16%.

The family offices overall had a return of 5.4%, based on different methodology from previous surveys, and compared with a 2.2% drop in the MSCI All Country World Index () in the 12 months to May 2019.

The surveyed firms manage a total of $330 billion in assets.

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