Family offices are taking a more defensive stance in 2025, as new U.S. tariffs and ongoing geopolitical tensions weigh on sentiment. According to a recent survey by RBC Wealth Management and Campden Wealth, over half of ultra-wealthy investment firms now see cash and other liquid assets as offering the best returns in the next year, while roughly a third are looking to artificial intelligence as a key opportunity.
The survey of 141 North American family offices — conducted between April and August, shortly after President Donald Trump’s tariff announcement — shows a marked shift from growth-oriented strategies. In 2024, investors favoured growth equities and defence sectors; this year, priorities have turned toward liquidity and capital preservation.
Average return expectations have also fallen sharply, with projected portfolio returns dropping to 5% in 2025 from 11% last year. About 15% of respondents expect negative returns, compared with almost none in 2024. The most common priority for the year ahead is improving liquidity, replacing diversification as last year’s top focus.
While U.S. markets have since rebounded to record highs, concerns persist. Over half of respondents flagged U.S. dollar depreciation as a major risk — the currency has fallen nearly 9% year-to-date, with analysts at UBS and others predicting further weakness.
Private equity remains another pain point. Nearly one in four family offices reported disappointing returns from PE funds, while 15% said their direct investments underperformed. Venture capital scored the lowest sentiment overall, with a third of respondents citing poor returns.
Despite the bearish tone, many offices are using their growing cash reserves strategically. RBC’s Bill Ringham noted that families are “taking a much longer view of their legacy,” using liquidity not only for protection but to seize future opportunities as markets evolve.
Looking ahead, only a small net increase (3%) of family offices plan to allocate more to cash, compared with 20% planning to increase exposure to direct private equity and 13% to private equity funds.
As Ringham explained, private markets remain essential for long-term wealth creation:
“Even though private equity hasn’t performed well recently, over the long horizon — 100 years or more — it still offers returns that outpace most other asset classes.”
The findings reflect a climate of cautious optimism — one where family offices are balancing prudence with patience, waiting for the right moment to put capital back to work.
