Global family offices are rebalancing their portfolios away from cash toward more diversified investment mixes, according to a new joint report by Agreus Group and KPMG Private Enterprise.
The study found that family offices are combining public equities, private markets, credit, real assets, and thematic investments to achieve a more balanced risk–return profile. It noted, compared with last year’s survey, overall risk exposure has increased moderately, driven by higher allocations to equities and private equity. Meanwhile, venture capital and hedge fund exposures have remained largely unchanged from 2023.
As family offices seek yield diversification and income generation, they’re expanding their exposure to private credit, noted the report. And while 80% of respondents have yet to invest in digital assets, exposure has risen modestly, which can be attributed to younger family members and more favorable regulatory environments. Commodities, including gold, have also gained traction, it said, as has real estate allocations, which saw increases largely for inflation protection. Real estate now forms part of nearly 90% of all family office portfolios.
From an implementation perspective, investment approaches vary, with most (40%) family offices noting they engage in direct investing, while more than half (59%) said they invest through funds (36%) or co-investments (23%). More than two-thirds (68%) reported using a combination of all three.
Despite this growing sophistication, roughly half (51%) of respondents said they do not have a defined return-on-investment benchmark in place, while 49% said they do.
