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Financial Advisory  + Wealth Management  | 
Family Offices Ready to Put Money to Work, Eyeing Private Equity, Credit

Family Offices Ready to Put Money to Work, Eyeing Private Equity, Credit 

Family offices that manage money for the ultra-rich are not sitting on their cash but getting ready to unleash the stockpile into public and private markets, while adding fixed income exposure to capture higher rate opportunities, a survey by Goldman Sachs revealed. 

The survey – Family Office Investment Insights Report: Eyes on the Horizon – found that around 41% of family offices are planning to increase their private equity holdings in the next 12 months, with 30% set to grow their allocation to private credit, and three-quarters maintaining their hedge fund exposure. 

Family offices continue to hold sizable alternative assets holdings, with private equity, private real estate and infrastructure, hedge funds and private credit accounting for 44% of allocations. 

“Family offices have a generally constructive view on the market and may be willing to increase risk in their portfolios,” Goldman Sachs’ report said of the segment’s sustained appetite for alts and private investments. 

The report’s key findings suggest that despite major challenges across asset classes stemming from continued higher inflation and hawkish central bank policy, coupled with concerns over recession and geopolitics, family offices’ allocations have changed only modestly since the previous report in 2021. 

Family offices currently maintain higher cash and cash equivalent holdings compared with other institutional investors, with an average allocation of 12%. But more than a third plan to decrease their cash allocation in the coming year. 

Conducted between January 17 and February 23, 2023, the survey polled 166 institutional family offices (privately held investment management companies for wealthy families) from around the world with a net worth of at least $500 million. Almost three-quarters have at least $1 billion to their family names. 

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About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.

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