Key Takeaways
- • Alternative assets now represent 44% of global family office portfolios, nearly equal to traditional assets, driven by the need for inflation hedging and private market premiums in a volatile environment.
- • Family offices are systematically reducing fixed income allocations and increasing exposure to alternative asset classes including private equity, real estate, and direct investments to sacrifice liquidity for higher returns.
- • Tommy Leung of UBS Global Wealth Management notes that rising interest rates and high inflation are forcing family offices to review and reposition their strategic asset allocations away from long-duration fixed income.
- • The UBS Global Family Office Report 2025 surveyed 317 family office clients with average net worth of USD 2.7 billion, each managing USD 1.1 billion on average, capturing views on asset allocation shifts and portfolio construction.
- • Global trade war concerns rank as the top investment risk for family offices in 2025, prompting defensive hedging strategies including active management, hedge funds, and selective precious metals positions.
Summary
Family offices worldwide are executing a significant portfolio reorientation, moving capital away from fixed income into alternative investments as they navigate heightened macroeconomic uncertainty and seek enhanced returns. According to the UBS Global Family Office Report 2025, alternative assets have reached 44% of global family office portfolios—approaching parity with traditional assets—representing a structural shift in how ultra-high-net-worth families allocate capital across generations.
The transition reflects a deliberate response to the current economic environment. Rising interest rates and elevated inflation have prompted family offices to cut allocations to long-duration fixed income assets while simultaneously increasing investments in private equity, real estate, and direct investment opportunities. Tommy Leung, co-head of global family and institutional wealth for the Asia-Pacific region at UBS Global Wealth Management, emphasized that many family offices are consciously trading liquidity for higher potential returns in this challenging environment. This shift toward alternatives—which traditionally represented just one component of diversified portfolios—now reflects a fundamental recalibration of family office strategy.
The UBS research, which surveyed 317 family office clients between January and April 2025, provides substantial empirical support for this trend. The surveyed families maintained average net worth of USD 2.7 billion, with each family office managing USD 1.1 billion on average. Beyond asset allocation, the report reveals that family offices are simultaneously addressing heightened geopolitical and macroeconomic risks. A global trade war ranked as the biggest investment concern for 2025, followed by major geopolitical conflict and inflation persistence. In response, family offices are employing defensive strategies including active management approaches, hedge fund allocations, and selective positions in precious metals.
Regional positioning reflects cautious optimism in developed markets. Family offices have tilted allocations toward North America and Western Europe while simultaneously lifting weightings in developed market equities and bonds—suggesting they are seeking both liquid opportunities for capital growth and yield-generating assets amid volatility. The strategic reorientation demonstrates that family offices view alternatives not as supplementary investments but as essential components for portfolio resilience, diversification benefits, and exposure to private market premiums unavailable in public markets.
The transition reflects a deliberate response to the current economic environment. Rising interest rates and elevated inflation have prompted family offices to cut allocations to long-duration fixed income assets while simultaneously increasing investments in private equity, real estate, and direct investment opportunities. Tommy Leung, co-head of global family and institutional wealth for the Asia-Pacific region at UBS Global Wealth Management, emphasized that many family offices are consciously trading liquidity for higher potential returns in this challenging environment. This shift toward alternatives—which traditionally represented just one component of diversified portfolios—now reflects a fundamental recalibration of family office strategy.
The UBS research, which surveyed 317 family office clients between January and April 2025, provides substantial empirical support for this trend. The surveyed families maintained average net worth of USD 2.7 billion, with each family office managing USD 1.1 billion on average. Beyond asset allocation, the report reveals that family offices are simultaneously addressing heightened geopolitical and macroeconomic risks. A global trade war ranked as the biggest investment concern for 2025, followed by major geopolitical conflict and inflation persistence. In response, family offices are employing defensive strategies including active management approaches, hedge fund allocations, and selective positions in precious metals.
Regional positioning reflects cautious optimism in developed markets. Family offices have tilted allocations toward North America and Western Europe while simultaneously lifting weightings in developed market equities and bonds—suggesting they are seeking both liquid opportunities for capital growth and yield-generating assets amid volatility. The strategic reorientation demonstrates that family offices view alternatives not as supplementary investments but as essential components for portfolio resilience, diversification benefits, and exposure to private market premiums unavailable in public markets.
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