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.