The world’s wealthiest families are increasingly turning to family offices to manage their wealth, investments, and other assets. A recent survey of more than 338 family offices revealed a significant shift in investment strategies, with a prominent move towards risk assets rather than cash. According to the survey, 43% of family offices increased their exposure to public and private equity in 2024.
Half of the respondents also upped their allocation to fixed income, while investments in real estate remained stable for the second consecutive year, despite concerns over high interest rates. Richard Weintraub, head of Citi Private Bank’s Family Office Group in the Americas, explained: “Last year, over 95% of clients expected a decent return, and that happened over the past 12 months. This gives me confidence that sophisticated family offices expect another bullish year in the markets.”
The rise in family offices is also evident in the growing amount of wealth they manage.
Currently, family offices hold an estimated $5.5 trillion, up from $3.3 trillion in 2019. Projections indicate that this figure could increase by 189% by 2030.
Wealthy families embrace family offices
Defining a family office can be challenging. “The terminology of a family office is like describing a car simply as ‘red’; it doesn’t tell you much about its size or capabilities,” said Weintraub. Generally, a family office involves extraordinary wealth and a desire for control.
Their structures can vary widely, from small teams to large operations with over 100 advisors. Family offices provide a way for the ultra-wealthy to efficiently manage their assets, mitigate risks of over or under allocating resources, and preserve wealth across generations. “Your own investment team will follow the guidance that you’ve given them,” Weintraub noted, emphasizing the importance of control and coherence in managing diverse aspects such as financial investments, philanthropy, and art collecting.
As family offices continue to grow in number and scale, they are set to play an increasingly important role in the financial strategies of the world’s wealthiest families. The trend towards riskier assets reflects a growing confidence among these families, who are looking to secure and grow their wealth through the specialized services provided by family offices.
