Key Takeaways
- • Family offices managing over C$1 billion in assets plan to increase private equity allocations by nearly 70 percent year-over-year in 2025, with two-thirds of these offices committing to higher fund investments, according to Bloomberg Law data.
- • Nearly two-thirds of family offices expect to execute six or more direct investments in 2025, representing a 10 percent increase in direct deal activity over the past 12 months, signaling a structural shift toward active deal sourcing and co-investment participation.
- • Alternative assets now represent 42 percent of the average family office portfolio, up from 39 percent in 2023, driven by geopolitical uncertainty and economic volatility that 84 percent of family offices cite as a primary investment consideration.
- • Family offices are deploying capital through increasingly sophisticated structures beyond traditional fund commitments, including direct investments, co-investments, and bespoke private market vehicles tailored to multi-generational objectives and flexible exit timelines.
- • International expansion among family offices is accelerating, with over 60 percent of Saudi family offices now operating across multiple geographies compared to 25 percent a decade ago, reflecting a global diversification strategy.
Summary
Family offices have fundamentally repositioned themselves within the private equity ecosystem, transitioning from passive, background investors into active market participants with substantial deal-making influence. This evolution, once viewed as an emerging trend, is now a defining characteristic of the 2025 private equity landscape. According to Bloomberg Law research, among family offices with assets exceeding C$1 billion, two-thirds plan to increase their allocations to private equity funds this year, marking a nearly 70 percent year-over-year increase from 2024. This capital deployment reflects both confidence in private market fundamentals and a deliberate portfolio reorientation toward alternative assets.
The shift toward direct investing and co-investment participation has become particularly pronounced. Bank of New York Mellon data indicates that nearly two-thirds of family offices anticipate making six or more direct investments during 2025—a 10 percent increase in direct deal activity compared to the prior 12-month period. This metric underscores a structural change in how family offices approach capital allocation, moving beyond passive fund commitments toward active deal origination and participation in club structures that align with their specific return objectives and governance preferences.
The investment environment driving this activity remains characterized by significant geopolitical and macroeconomic uncertainty. BlackRock's "Rewriting the Rules – Family Offices Navigate a New World Order" report notes that 84 percent of family offices identify the current geopolitical landscape as a key challenge directly influencing their investment decision-making. In response, family offices have substantially increased their exposure to alternative asset classes as a risk mitigation strategy. Alternative investments now comprise 42 percent of the average family office portfolio, up from 39 percent in 2023—a three-percentage-point increase reflecting deliberate portfolio repositioning toward illiquid, long-duration assets less correlated with public markets.
Family offices are increasingly structuring investments through customized private market vehicles that accommodate their unique characteristics: extended time horizons, multi-generational capital bases, and absence of fixed redemption schedules that constrain institutional managers. This flexibility enables family offices to pursue longer hold periods, participate actively in value creation post-acquisition, and design bespoke co-investment arrangements. Geographic diversification is also accelerating, with over 60 percent of Saudi family offices now deployed internationally compared to 25 percent a decade ago, reflecting broader capital redeployment across emerging and developed markets. The combination of increased allocation size, direct investment participation, and geographic expansion positions family offices as consequential capital providers reshaping deal sourcing, pricing, and governance within private equity.
The shift toward direct investing and co-investment participation has become particularly pronounced. Bank of New York Mellon data indicates that nearly two-thirds of family offices anticipate making six or more direct investments during 2025—a 10 percent increase in direct deal activity compared to the prior 12-month period. This metric underscores a structural change in how family offices approach capital allocation, moving beyond passive fund commitments toward active deal origination and participation in club structures that align with their specific return objectives and governance preferences.
The investment environment driving this activity remains characterized by significant geopolitical and macroeconomic uncertainty. BlackRock's "Rewriting the Rules – Family Offices Navigate a New World Order" report notes that 84 percent of family offices identify the current geopolitical landscape as a key challenge directly influencing their investment decision-making. In response, family offices have substantially increased their exposure to alternative asset classes as a risk mitigation strategy. Alternative investments now comprise 42 percent of the average family office portfolio, up from 39 percent in 2023—a three-percentage-point increase reflecting deliberate portfolio repositioning toward illiquid, long-duration assets less correlated with public markets.
Family offices are increasingly structuring investments through customized private market vehicles that accommodate their unique characteristics: extended time horizons, multi-generational capital bases, and absence of fixed redemption schedules that constrain institutional managers. This flexibility enables family offices to pursue longer hold periods, participate actively in value creation post-acquisition, and design bespoke co-investment arrangements. Geographic diversification is also accelerating, with over 60 percent of Saudi family offices now deployed internationally compared to 25 percent a decade ago, reflecting broader capital redeployment across emerging and developed markets. The combination of increased allocation size, direct investment participation, and geographic expansion positions family offices as consequential capital providers reshaping deal sourcing, pricing, and governance within private equity.
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