How Family Offices Are Adapting Investment Approaches amid Global Volatility

Shift Toward Public Equities Surpasses Private Equity

Family offices overseeing ample wealth portfolios are increasingly favoring public equities, reducing their stakes in private equity investments. On average, these entities now dedicate 31% of their assets to publicly traded stocks, reflecting a 3% increase compared to last year. In contrast, allocations toward private equity have dropped from 26% down to 21%, marking the most notable change among all asset classes examined.

this movement is particularly evident in the Americas region, where family offices raised their public equity exposure from 27% to 31%.Although private equity holdings decreased slightly by two percentage points-hovering near 25%-these levels remain above those seen in other global regions. The insights come from a survey involving 245 family offices worldwide, with nearly two-thirds managing assets exceeding $1 billion.

Market Dynamics and Risk Preferences Drive Portfolio adjustments

The current investment landscape reveals that many family offices maintain a “pro-risk asset mix,” signaling ongoing confidence in growth-focused opportunities despite geopolitical uncertainties and inflationary challenges. Over three-quarters of participants expect tariffs either to stay constant or rise over the next twelve months while forecasting stable or declining market valuations.

Tax considerations also play a crucial role in shaping investment timing and strategy. In the United States, large-scale asset sales can trigger significant tax burdens for these investors. Many take advantage of market disruptions-such as tariff announcements-to strategically deploy capital when others pull back.

Public Markets Dominate AI-Focused Investments

A vast majority of family offices are channeling resources into artificial intelligence primarily through public equities and ETFs linked to AI innovation; about 86% report some level of exposure within this sector. beyond direct investments in AI companies, many allocate funds toward industries benefiting indirectly from AI progress-as an example, firms operating data centers or venture capital vehicles specializing in emerging technologies related to artificial intelligence.

The rising Appeal of Private Equity Secondaries

Despite an overall reduction in private equity allocations, interest remains strong for secondary market transactions within this space. Currently, approximately 72% of surveyed family offices participate in secondaries-a significant jump from last year’s figure near 60%. Unlike endowments and foundations that often reduce such holdings due to liquidity demands, family offices leverage these opportunities to acquire high-quality assets at discounted prices with long-term investment horizons.

“These investors benefit from generational timeframes without pressure for quick exits,” explains Meena Flynn,co-head of global private wealth management at Goldman Sachs.

Optimistic Outlook Spurs Increased Allocations Across Asset Classes

A notable share-39%-of respondents plan on boosting commitments toward private equity over the next year-the highest among all categories surveyed-with nearly as many (38%) intending greater stock investments. While most anticipate portfolio structures will largely remain steady overall more participants aim for allocation increases rather than reductions; only around one-sixth expect higher cash reserves moving forward.

Diversification Strategies Target Tail Risk Mitigation

The approach toward hedging tail risks varies substantially by geography: over one-third of American-based family offices do not actively hedge against extreme downside events compared with just above ten percent among European (EMEA) and Asia-Pacific (APAC) counterparts. Geographic diversification emerges as the primary defense against unexpected shocks at roughly half (53%), followed by gold holdings accounting for nearly a quarter (24%).although gold typically represents less than one percent on average within portfolios globally some clients hold physical gold positions reaching up to fifteen percent amid concerns about political instability worldwide.

“In regions experiencing elevated political uncertainty,” Flynn observes,“clients prefer tangible ownership-they want serial numbers documented alongside secure vault storage.”