Key Takeaways
- • Family offices are executing a strategic pivot toward private assets and endowment-style portfolio structures, moving away from cash holdings to shield capital from market volatility and geopolitical uncertainty.
- • The number of family offices with allocations to private markets has surged 524% since 2016, growing from 651 to 4,067 entities, according to Preqin data, signaling widespread institutional adoption of alternatives.
- • A KPMG/Agreus survey of nearly 600 family office employees found that family offices are rebalancing portfolios across equities, private markets, credit, real assets, and thematic investments in a "more strategic, long-term mindset" focused on wealth preservation for future generations.
- • Family offices are consolidating operations and adopting more conservative recruitment and compensation strategies as rising operational costs drive focus toward cost control and efficiency rather than team expansion.
- • BlackRock research indicates family offices are specifically boosting allocations to private credit and infrastructure as core diversification strategies amid global economic uncertainty.
Summary
Family offices are executing a deliberate strategic shift toward private assets and endowment-style portfolio construction, moving away from cash-heavy positions to mitigate market volatility and geopolitical risks. This reorientation reflects a fundamental change in how ultra-high-net-worth families approach capital stewardship, emphasizing wealth preservation and intergenerational value transfer over near-term asset deployment strategies.
According to a KPMG Private Enterprise and Agreus Group survey of nearly 600 family office employees, complemented by 20 in-depth interviews with senior leadership, family offices have substantially rebalanced their holdings over the past year. The research found that families are now diversifying across equities, private markets, credit, real assets, and thematic investments. As the report states, this shift "signals a more strategic, long-term mindset, as families focus on safeguarding their capital for future generations rather than simply managing its day-to-day deployment."
Market data underscores the scale of this institutional migration. Preqin research shows that the number of family offices with allocations to private markets has expanded dramatically—surging 524% since 2016, from 651 to 4,067 entities. This growth reflects private markets' emergence as a core component of family office strategy, impacting not only asset allocation decisions but also governance structures and operational frameworks. BlackRock survey findings further confirm this trend, revealing that family offices are actively increasing allocations to private credit and infrastructure as key diversification instruments.
Concurrent with this portfolio evolution, family offices are implementing more disciplined operational strategies. The KPMG/Agreus report found that family offices are consolidating, adopting "a more conservative approach to recruitment, cost, and compensation" as rising operational expenses prompt tighter cost control. Hiring activity remained "relatively muted" over the past year, with most family offices reporting unchanged team structures. This reflects both market uncertainty and a strategic pivot toward maximizing existing internal capabilities rather than expanding external resources—a marked departure from the post-COVID period when family offices competed aggressively for talent.
According to a KPMG Private Enterprise and Agreus Group survey of nearly 600 family office employees, complemented by 20 in-depth interviews with senior leadership, family offices have substantially rebalanced their holdings over the past year. The research found that families are now diversifying across equities, private markets, credit, real assets, and thematic investments. As the report states, this shift "signals a more strategic, long-term mindset, as families focus on safeguarding their capital for future generations rather than simply managing its day-to-day deployment."
Market data underscores the scale of this institutional migration. Preqin research shows that the number of family offices with allocations to private markets has expanded dramatically—surging 524% since 2016, from 651 to 4,067 entities. This growth reflects private markets' emergence as a core component of family office strategy, impacting not only asset allocation decisions but also governance structures and operational frameworks. BlackRock survey findings further confirm this trend, revealing that family offices are actively increasing allocations to private credit and infrastructure as key diversification instruments.
Concurrent with this portfolio evolution, family offices are implementing more disciplined operational strategies. The KPMG/Agreus report found that family offices are consolidating, adopting "a more conservative approach to recruitment, cost, and compensation" as rising operational expenses prompt tighter cost control. Hiring activity remained "relatively muted" over the past year, with most family offices reporting unchanged team structures. This reflects both market uncertainty and a strategic pivot toward maximizing existing internal capabilities rather than expanding external resources—a marked departure from the post-COVID period when family offices competed aggressively for talent.
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