Geopolitical uncertainties, economic recession concerns, and increasing skepticism around the supremacy of the U.S. dollar are leading to a shift in the investment strategies of affluent families globally. The new Global Family Office Report from UBS reveals that more family offices are considering strategic alterations to their portfolios than ever before.
The report sheds light on how investors are adjusting their portfolios in response to geopolitical instabilities and structural risks. UBS’ survey, which involved 307 global family offices across over 30 markets, each with an average net worth of $2.7 billion, shows that 60% of respondents are planning to amend their strategic asset allocation within the next year. The focal point of this repositioning is wider diversification across regions, currencies, and asset types, along with an increased emphasis on long-term thematic investments.
Artificial Intelligence (AI) remains a particularly attractive investment opportunity. The report finds that 65% of family offices have made investments throughout the entire AI value chain, spanning from data centers and software platforms to semiconductor manufacturers. Although valuations are high, many investors intend to boost or maintain their exposure in this arena.
Family offices are also showing keen interest in investments related to infrastructure, energy, and commodities, while cryptocurrencies are seen as a more niche allocation. The survey found that only 44% of invested family offices currently consider digital assets as part of their strategic asset allocation, with actual portfolio exposures remaining relatively modest.
In terms of governance and succession planning, many family offices are falling short. The report shows that only about a third have a clearly defined succession plan, and just 27% are preparing the next generation in an organized manner for future leadership roles.
Family offices in North Asia are leaning towards a technology-driven and globally diversified investment strategy, with 74% of their investments related to AI. Southeast Asian family offices are even more invested in AI, with 88% already invested in the sector.
What is the main investment focus of family offices according to the UBS report?
The main focus is on broader diversification across regions, currencies, and asset types, along with an increased emphasis on long-term thematic investments, especially in Artificial Intelligence.
How are family offices approaching the issue of succession planning?
The report reveals that only about a third of family offices have a clearly defined succession plan in place, and just 27% are preparing the next generation for future leadership roles in an organized manner.
What is the stance of family offices on cryptocurrencies?
Cryptocurrencies are considered more of a niche allocation. Only 44% of the family offices that have made investments currently consider digital assets as part of their strategic asset allocation.
