Half of Qatari family offices optimistic on recovery to 2019 level: Deloitte

Family offices in Qatar show a strong sense of optimism about the recovery from the COVID-19 challenges with 50 percent expecting to return pre-crisis levels of operations within 12 months, according to a survey by Deloitte.

The global audit and assurance provider Deloitte Middle East’s Qatar Family Office survey was conducted recently and provides insight from 35 of the most prominent family groups across the country.

Family offices continue to play a key role in bringing development and growth to Qatar and across the Middle East. But the COVID-19 has created some challenges in the operating environment of some unique opportunities across the entire family ecosystem, operating businesses and investments, and private wealth.

“In response to these changes, families had to quickly adapt business models and strategies to ensure continuity and provide a platform to thrive. Overall, the outlook from the community is largely one of optimism, 18 percent of respondents report having already returned to previous levels of business activity, with another 50 percent expecting a return to near-normal levels of operations within 12 months.”

Nearly half of the respondents plan to invest within the next 18 months, in many respects within new industries and across the value chain. While considering the risk factors, declining oil prices and ongoing liquidity issues ranked as the most prevalent.

Many families have revisited and adjusted their strategies by giving high priority to cost reduction. Further, the focus is on developing talent within families and preparing the next generation with 11 percent believing their next-generation were ready to take the reins now.

The survey shows that optimism has become a dominant theme despite the ongoing challenges. Revenue impact reflects reductions over 10 percent compared to 2019 levels for 70 percent of the families, with approximately half of these suffering decreases of more than 20 percent.

“Technology remains the area where most families see a need for review/change to adapt to the new economic landscape. Group strategy stands out as the area needing immediate attention and change. Responses confirm that the medium-term strategy has been altered by 80 percent of families, with trends visible in the pursuit of leaner and more agile operations and desire to move into new products/markets,” the survey revealed.

David Bowen, Head of Family Office Consulting, Deloitte UK, says, “For many, COVID-19 shone the light on governance and risk in the family office. Key individuals and decision-makers’ incapacitation impacted the ability to make decisions and to implement them. This has subsequently led to a real focus by families to simplify structures that hold and advise the families on the wealth along the decision-making process.”