According to Citi’s 2024 Family Office Survey, more family offices globally are shifting from holding cash to investing in riskier assets, driven by optimism about their portfolio performance over the next year.
Despite concerns over high or rising interest rates, 43% of surveyed family offices increased their exposure to public and private equity. Additionally, 49% boosted their allocation to fixed income as yields hit multi-year highs, while allocations to cash dropped from 50% in 2023 to 31% in 2024.
Sentiment around asset class performance has improved, with the most confidence in direct and fund-based private equity, as well as globally developed equities. Nearly all respondents expect positive returns in the next 12 months, with half predicting 5-10% gains and one-third expecting 10-15%.
Inflation, a major worry in 2021, is no longer the top concern; interest rates, US-China relations, and market overvaluation have taken priority. Public equity allocations have risen from 22% to 28%, while private equity saw a slight decrease due to slower valuation adjustments. Geographically, North America holds the highest asset allocation, followed by Europe and the Asia-Pacific, with China allocations halving due to economic challenges.
In the Asia-Pacific region, 68% of family offices increased their public equity investments, the highest compared to other regions. Direct investing also surged in this region, with 69% reporting increased activity.
Globally, family offices remain focused on preserving wealth and preparing future generations to manage it. Meeting family members’ expectations has emerged as the top challenge, surpassing concerns about adapting to market conditions.
