Strategic asset allocation is a cornerstone of family office investment policy, driving the long-term performance, diversification, and resilience of the family’s wealth.1 The asset mix and its evolution reflect global macro trends, family needs, risk appetite, and the desire to preserve wealth and foster growth across generations.
Current Trends in Family Office Asset Allocation #
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- Bonds and Equities: Recent years saw a shift back toward a balanced split between fixed income and equities, in response to elevated yields and moderating inflation expectations.
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- Private Markets: Private equity, including direct investments and funds of funds, remains a major allocation, with global averages at 11%–26% and a strong tactical overweight among leading offices.
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- Real Estate: Allocations to real estate have declined as market uncertainty and rising rates reduced valuations. In Europe, allocations are higher (~11%) versus the global average (~10%).
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- Geographical Tilt: Portfolios retain a home bias, with North America and Asia-Pacific being the largest targets for added allocations.
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- Alternative Assets and ESG: New allocations show growing interest in diversifying into alternatives and integrating ESG factors for risk mitigation and long-term value.
Portfolio strategies balance growth, liquidity, and risk, with family offices tending toward a “balanced” approach but signaling increasing risk appetite as inflationary pressures and low yields recede.
Best Practices in Strategic Asset Allocation #
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- Focus on broad diversification across asset classes, geographies, and liquidity profiles
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- Regularly review allocation in context of macro shifts and family goals
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- Use scenario analysis and risk modeling for allocation decisions
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- Monitor and benchmark returns against inflation and tailored objectives
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- Adapt to new opportunities (private markets, technology) while maintaining discipline
Periodic rebalancing in response to market, family, and regulatory changes is critical to sustaining performance and mitigating volatility.
See Also #
References #
