Global families hold strong on public equities as private equity exits remain lacklustre
Goldman Sachs’ Family Office Investment Insights report reveals that demand for public equities has risen slightly on 2023 levels
Family offices are “prepared to stay the course” in an era of greater stock market risk and have upped their allocations to public equities thus far in 2025, according to Goldman Sachs’ Family Office Investment Insights report. Interest in private equity among family offices has wavered as global merger and acquisition deal volumes continue a slow recovery, while infrastructure exposures have grown.
The global bank's recent survey, which polled 245 family offices across the Americas, Europe, the Middle East and Africa, and the Asia-Pacific region on their investment interests, revealed that demand for public equities has risen slightly on 2023 levels, with an average portfolio allocation for all family offices at 31 per cent this year, up from 28 per cent.
Some family offices recently interviewed by AOX’s sister publication MandateWire underscore the continued interest in equities. In September, MandateWire reported that the Coutts Family Office, which serves a host of ultra-wealthy families, remains "very positive" on US equities.
Adam Brownlee, its executive director, told MandateWire the family office's base case position remains that "there won't be a recession in the US", adding that "all the indicators that we're seeing [suggest] that is not going to be the case, and that's driving our US overweight strategy".
In spite of this, half of the Goldman Sachs survey respondents said the possibility of a US recession in the next 12 months has risen.
While investors' average portfolio allocations to public equities have increased, take up of private equity has dropped slightly, to an average 21 per cent allocation from 26 per cent in 2023.
Indeed, data from EY and Dealogic shows that while merger and acquisition deal values climbed in the first half of the year to $2tn (£1.5tn), up 30 per cent on a year ago, the number of deals worth $100mn or more globally fell in the second half of 2024, to fewer than 250.
"Asset allocation trends remain steady with modest adjustments amid evolving market conditions," the report explains. "Public equity allocations returned to 2021 levels alongside a pullback in private equity, as muted exits weighed on commitments."
Yet private equity was still the most popular alternative asset class among family offices in the survey.
While allocations to alternative assets fell slightly, to an average portfolio allocation of 42 per cent, down from 44 per cent, it is typical for ultra-wealthy clients to have high allocations to unlisted assets and alternative opportunities. In a recent survey on the global wealth market, EY found that more than four-fifths (82 per cent) of ultra-wealthy clients were using alternative investment products.
Interest in tech and AI
Family office investors have maintained a large overweight to technology, with nearly six in 10 (58 per cent of) family offices expecting their portfolios to stay overweight to these opportunities during the coming year.
Interest is, at least in part, being driven by the unstoppable growth in artificial intelligence investments. A whopping 86 per cent of the survey respondents reported they have positions in AI technology.
"A secular growth theme with tremendous impact on public equities has been AI, particularly when looking at megacap technology names. In our observations, many family offices have been capitalizing on dislocations and using volatility for market entry and yield enhancement," Goldman's report reads.
Dip in private equity as infrastructure soars
Just as public equities have grown in popularity, private equity has fallen, to an average allocation of 21 per cent among the family offices surveyed, from 26 per cent in 2023.
Yet over the next 12 months, high take up of both public and private equities is expected, with almost four in 10 family offices (38 per cent and 39 per cent, respectively) saying they expect allocations to increase.
Allocations to public equities were broadly equal among the regional investors surveyed — with average allocations of 31 per cent in the Americas, 32 per cent in the EMEA region and 30 per cent in Asia-Pacific. However, private equity allocations were lower in APAC (15 per cent) than in EMEA (22 per cent) and the Americas (25 per cent).
““[Family offices are] prepared to stay the course, but also to lean into areas like private credit and public equities where they see compelling opportunities to generate returns””
Private real estate exposures have also risen to an average allocation of 11 per cent, from 9 per cent in 2023, while investments in private credit have increased marginally to 6 per cent.
Infrastructure investments remained popular, with more than half (56 per cent) of the family offices surveyed taking up allocations.
"Infrastructure fundraising is pacing toward a record year, amid several evolving 'megatrends' in the global economy," the report notes. "As an example, the drive towards digitization is likely to lead to a significant increase in data center power consumption and, in turn, new capital expenditure."
“[Family offices are] prepared to stay the course, but also to lean into areas like private credit and public equities where they see compelling opportunities to generate returns”
Families remain sanguine in era of growing risk
While around four in 10 family offices plan to up their exposures to public and private equities, a slightly smaller share (26 per cent) intends to raise allocations to private credit.
Of the strong overall interest in asset classes carrying a greater risk, Sara Naison-Tarajano, global head of Goldman's Apex division and private wealth management capital market, says families are "prepared to stay the course, but also to lean into areas like private credit and public equities where they see compelling opportunities to generate returns".
They are "signalling confidence" in long-term portfolio positions "while remaining disciplined in their approach", she added.
Yet families have reported greater exposure to risks globally. More than six in 10 family office investors identified geopolitics as a challenge for their investments, which rose to three-quarters of investors (75 per cent) in the Asia-Pacific region. Some families are also concerned about rising political challenges (39 per cent of respondents).
Overall, more than three-quarters (77 per cent) of the survey's respondents say they expect economic protectionism to increase in the year ahead, while two-thirds say geopolitical risks will rise.
Yet this is not weighing down too significantly on family investment decisions. "Family offices have shown extraordinary consistency in their investment approach despite expressing concerns about geopolitical tensions and protectionist trade policies," says Meena Lakdawala-Flynn, co-head of Goldman Sachs' global private wealth management division.
"[These] results underscore how family offices' long-term orientation and flexibility enable them to manage volatility while capturing opportunities," she adds.