Key Takeaways
- • Persistent inflation has emerged as the top investment risk for family offices globally, surpassing geopolitical and macroeconomic concerns, according to Citi Wealth's Global Family Office Report covering 351 executives across 40+ countries.
- • Nearly 90% of surveyed family office executives reported positive portfolio performance year-to-date, with 41% maintaining target annual returns between 7% and 10%.
- • Inflation concerns are reshaping asset allocation strategies, with family offices shifting capital toward public equities due to higher valuations and liquidity, while becoming significantly more selective in private equity and private markets commitments.
- • Family offices are prioritizing preservation of real wealth and purchasing power alongside nominal returns, reflecting a fundamental shift in long-term portfolio construction and spending policies.
- • Respondents indicate heightened interest in direct and co-investment opportunities within private markets, signaling a move toward greater control and transparency over manager relationships.
Summary
Family offices worldwide are reassessing risk frameworks as persistent inflation takes precedence over other macro concerns in investment decision-making. The newly released Global Family Office Report from Citi Wealth, which surveyed 351 family office executives across more than 40 countries, reveals that inflation has overtaken geopolitical uncertainty and interest rate volatility as the primary investment risk on institutional investors' minds. This marks a notable shift in risk perception as the sector navigates an evolving macroeconomic landscape shaped by tariff policies in 2025 and global conflict in 2026.
Despite inflation headwinds, family office performance metrics remain robust. Nearly nine in ten respondents reported positive portfolio returns year-to-date, with a substantial portion—41%—continuing to target annual returns in the 7% to 10% range. However, this headline performance masks deeper concerns about real wealth preservation. According to the report, inflation is fundamentally influencing portfolio construction, spending policies, and liquidity management decisions. For family offices managing multi-generational wealth, the distinction between nominal and real returns has become critical to long-term strategy.
The inflation narrative is driving measurable shifts in capital allocation. Family offices are increasingly channeling investment dollars into public equities, attracted by higher valuations and superior liquidity characteristics relative to alternatives. Simultaneously, the sector remains engaged with private markets and private equity but with considerably greater selectivity. Family offices are shifting away from traditional fund commitments toward direct and co-investment structures, a strategic pivot that reflects both heightened due diligence standards and a preference for greater transparency and control over underlying exposures. This rebalancing underscores how inflation concerns are reshaping not just what family offices invest in, but how they structure those investments and manage counterparty relationships.
Despite inflation headwinds, family office performance metrics remain robust. Nearly nine in ten respondents reported positive portfolio returns year-to-date, with a substantial portion—41%—continuing to target annual returns in the 7% to 10% range. However, this headline performance masks deeper concerns about real wealth preservation. According to the report, inflation is fundamentally influencing portfolio construction, spending policies, and liquidity management decisions. For family offices managing multi-generational wealth, the distinction between nominal and real returns has become critical to long-term strategy.
The inflation narrative is driving measurable shifts in capital allocation. Family offices are increasingly channeling investment dollars into public equities, attracted by higher valuations and superior liquidity characteristics relative to alternatives. Simultaneously, the sector remains engaged with private markets and private equity but with considerably greater selectivity. Family offices are shifting away from traditional fund commitments toward direct and co-investment structures, a strategic pivot that reflects both heightened due diligence standards and a preference for greater transparency and control over underlying exposures. This rebalancing underscores how inflation concerns are reshaping not just what family offices invest in, but how they structure those investments and manage counterparty relationships.
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