Liquidity Concerns, Compensation Pay Gap Highlight New Family Office Report

Liquidity has emerged as the dominant concern for family offices, according to the 2026 North America Family Office Report from RBC and Campden Wealth, which surveyed 155 family offices. The report describes liquidity as the "word of the year" for the sector, though it argues that growing concern about the lack of liquidity in private market funds may be a more accurate characterization. Nearly half of private-market fund investors could not complete an exit as expected, and half of those who were able to exit faced caps or restrictions.

The shift is reflected in allocation patterns. While 86 per cent of family offices remain invested in private markets, liquidity and cost concerns pushed the share going to funds down to 36 per cent, a reversal from last year. Direct investments rose to 45 per cent, with many offices applying the family's own sector knowledge to deals. Beth Francis, managing director and head of RBC's Enterprise Strategic Client Group, said liquidity had become a key differentiator in private markets, adding that offices increasingly prefer direct investments for control over when capital is returned. Brandelyn Perry, senior research director for Family Wealth Alliance, said client demand for private equity, private credit and co-investments remains strong, while noting concerns around capital calls during downturns, long lock-up periods, K-1 complexity and fee structures. Kara Pass, president and CEO of Market Street Trust, said her firm is leaning more on secondaries to shorten the wait for cash.

The report also identified a "family discount" in compensation for key senior roles. Median total compensation for non-family chief executives was $721,000, 44 per cent above the $460,000 earned by family-member CEOs. Non-family chief investment officers earned a median $575,000 versus $350,000 for family CIOs. The pattern reverses for chief operating officers, where family members earned a median $450,000, $75,000 more than non-family COOs. The median operating cost of responding offices was approximately $2.75 million, and offices expect costs to rise 5 per cent this year.

Market sentiment has turned more optimistic compared with last year, when respondents anticipated average annual returns of just 5 per cent. Adam Ratner, director of research for Campden Wealth, said the shift reflects a different reading of the cycle and warned that even patient capital can be affected by fear of missing out. Most offices selected AI as their top investment pick, and while three-quarters expect an AI investment bubble to burst, almost none plan to reduce exposure. Family offices also show optimism on real estate over the next two to five years. Pass said Market Street is "selectively opportunistic, not broadly bullish," citing a 10-year Treasury yield above 5 per cent for the first time since 2007, and favoring preferred equity and logistics, senior housing and student housing. Perry added that clients with large, low-cost-basis portfolios face tax constraints, with strategies such as direct indexing, long-short tax strategies, tax-loss harvesting and 351 exchanges in use.