Key Takeaways
- • Global family offices are systematically rebalancing portfolios away from cash toward diversified allocations across public equities, private markets, credit, real assets, and thematic investments, according to a joint Agreus Group and KPMG Private Enterprise report released in October 2025.
- • Overall risk exposure has increased moderately year-over-year, driven by higher allocations to equities and private equity, while venture capital and hedge fund exposures remained stable compared to 2023 levels.
- • Real estate penetration has expanded significantly, now representing nearly 90% of all family office portfolios, primarily motivated by inflation hedging; private credit expansion reflects pursuit of yield diversification and income generation.
- • Digital asset adoption remains limited (80% of respondents have not invested), though exposure has risen modestly due to younger family members and improved regulatory environments; commodities including gold have also gained traction.
- • Implementation diversity is pronounced: 40% engage primarily in direct investing, while 59% use fund structures (36%) or co-investments (23%), with 68% employing a combination of all three approaches—yet critically, 51% of respondents lack defined return-on-investment benchmarks.
Summary
Global family offices are executing a significant portfolio reallocation away from cash holdings toward more sophisticated, diversified investment structures, according to new research from Agreus Group and KPMG Private Enterprise. The shift reflects a strategic response to yield-seeking objectives and the need to balance risk-return profiles across multiple asset classes, including public equities, private markets, credit instruments, real assets, and thematic investments.
The report documents a moderate increase in overall risk exposure compared to the prior year, with higher equity and private equity allocations driving this expansion. Notably, venture capital and hedge fund exposures have remained largely flat relative to 2023 levels, suggesting family offices are not uniformly increasing risk across all alternative asset categories but rather pursuing targeted diversification in select areas. This selective approach indicates sophisticated portfolio management discipline within the sector.
Real estate has emerged as a dominant allocation priority, now embedded in nearly 90% of family office portfolios. This expansion is primarily attributable to inflation protection considerations rather than yield generation alone. Simultaneously, family offices are broadening their exposure to private credit markets as they pursue yield diversification and income generation objectives. Digital assets remain a peripheral allocation despite modest exposure growth, with 80% of respondents reporting no digital asset investments to date; however, this limited penetration is gradually changing due to generational wealth transfer dynamics and an increasingly favorable regulatory environment.
From an operational standpoint, family offices display considerable variation in implementation methodologies. Direct investing represents the primary approach for 40% of respondents, while 59% utilize fund structures (36% of this group) or co-investment vehicles (23%). Notably, 68% of respondents employ a hybrid approach combining all three methodologies, demonstrating institutional sophistication in execution. However, a significant governance gap persists: approximately 51% of respondents reported lacking defined return-on-investment benchmarks, suggesting potential inconsistency in performance measurement and accountability frameworks despite the sector's growing operational complexity.
The report documents a moderate increase in overall risk exposure compared to the prior year, with higher equity and private equity allocations driving this expansion. Notably, venture capital and hedge fund exposures have remained largely flat relative to 2023 levels, suggesting family offices are not uniformly increasing risk across all alternative asset categories but rather pursuing targeted diversification in select areas. This selective approach indicates sophisticated portfolio management discipline within the sector.
Real estate has emerged as a dominant allocation priority, now embedded in nearly 90% of family office portfolios. This expansion is primarily attributable to inflation protection considerations rather than yield generation alone. Simultaneously, family offices are broadening their exposure to private credit markets as they pursue yield diversification and income generation objectives. Digital assets remain a peripheral allocation despite modest exposure growth, with 80% of respondents reporting no digital asset investments to date; however, this limited penetration is gradually changing due to generational wealth transfer dynamics and an increasingly favorable regulatory environment.
From an operational standpoint, family offices display considerable variation in implementation methodologies. Direct investing represents the primary approach for 40% of respondents, while 59% utilize fund structures (36% of this group) or co-investment vehicles (23%). Notably, 68% of respondents employ a hybrid approach combining all three methodologies, demonstrating institutional sophistication in execution. However, a significant governance gap persists: approximately 51% of respondents reported lacking defined return-on-investment benchmarks, suggesting potential inconsistency in performance measurement and accountability frameworks despite the sector's growing operational complexity.
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