Family Offices Boost Stock Investments, Scale Back Private Equity Amid Geopolitical Concerns

Ultra-wealthy family offices are significantly increasing their allocation to public equities while reducing their exposure to private equity, according to a recent global survey by Goldman Sachs. The poll, which surveyed 245 family offices worldwide, revealed an average allocation of 31% to public stocks, a 3 percentage point rise since 2023. Conversely, private equity allocations dropped from 26% to 21% over the same period, marking the largest shift across all surveyed asset classes.

The move towards stocks was particularly pronounced in the U.S. and Americas, where family offices raised their public equity allocation from 27% to 31%. Despite this, their private equity allocation, though reduced, still exceeds that of their international counterparts. Goldman Sachs’ global head of hedge fund coverage, Tony Pasquariello, described the current portfolio mix as ‘pro-risk’ given the sustained, albeit lower, private equity holdings.

This strategic shift occurs amidst growing concerns over geopolitical risks and inflation, with more than three-quarters of respondents anticipating tariffs to remain high or increase, and valuations to stay flat or decrease in the next 12 months. Sara Naison-Tarajano, who leads Goldman Sachs’ Apex family office business, noted that family offices often invest opportunistically during market dislocations, such as those caused by recent tariff announcements.

The survey also highlighted artificial intelligence (AI) as a key investment theme, with 86% of family offices invested in AI through public equities, ETFs, or secondary beneficiaries like data centers. Furthermore, while overall private equity allocation decreased, 72% of family offices are actively engaging in private equity secondaries, up from 60% in 2023, capitalizing on opportunities as other institutions divest for liquidity. Looking ahead, 39% of family offices plan to increase their private equity allocations in the next year, with 38% planning to boost stock investments, underscoring a long-term commitment to staying invested across diverse asset classes.

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