Family Offices Look to Private Equity Amid Volatility

Family offices largely maintained their asset allocations, making fewer shifts than last year and half of respondents kept their fixed income holdings steady, and two thirds did so in real estate, according to Citi Wealth’s 2025 Global Family Office Report.

The report said that private equity (PE) saw the most notable bullish movement, with those increasing allocations outnumbering those decreasing by 26%. Citi Wealth surveyed 346 family offices, 23% of which are from Europe, Middle East nd Africa (EMEA), with an average net worth of $2.1 billion.

Among the minority who altered their public equity and fixed income exposure, a net 11% and 14% made increases respectively, well down from last year’s levels. Regionally, Asia Pacific made the greatest increases in public equity, with the Americas leading in private equity.

Overall, though, ongoing trade and monetary policy uncertainty, geopolitical tensions and fiscal concerns may have kept many family offices in wait-and-see mode.

Positive Outlook for Portfolio Returns

Family offices expressed optimism about twelve-month portfolio returns. Possible drivers of this positive sentiment include potential US deregulation, interest rate cuts and advancements in artificial intelligence.

A significant cohort (30%) anticipated returns between 10%–15%, with an additional 8% expecting returns exceeding 15%.

Despite the optimism, there was little consensus as to which asset classes could potentially drive portfolio performance. Sentiment was neutral across all asset classes on a six- to twelve-month horizon.

Even in private and public equity, neutral sentiment stood at 59%. It therefore seems likely that family offices believe their active selection of individual assets may drive portfolio returns, rather than broad asset class exposure.

Amid the market turmoil following the US tariffs announcement in April, nearly two thirds of family offices took action to boost portfolio resilience. Thirty-nine percent cited active management as their response.

They allocated more to perceived defensive asset classes and geographies (25% and 15% respectively). Some 14% engaged in hedging strategies while 13% shifted to perceived defensive sectors.

During the period, we noticed family offices showing even greater interest in seeking analyses of their liquid and illiquid risk exposures across all their providers. These frequently inform hedging and active investment strategies.

AI Deployment

The proportion of respondents mentioning artificial intelligence (AI) deployment has nearly doubled since last year, particularly in the automation of operational tasks (22%) and investment analysis or forecasting (22%).

However, this transformational technology has yet to be integrated across all functions, especially those involving risk and compliance. Barriers to technology adoption more generally included lack of internal expertise (57%), lack of awareness (34%), and concerns about cybersecurity and return on investment, the report said.