Family offices are increasingly bringing their investment operations in house and are allocating more of their assets to private markets, cryptocurrencies, collectibles and other niche investments.
BNY Wealth’s annual family office report, “2025 Investment Insights for Single Family Offices,” released Thursday, highlighted the thinking of 282 family office executives who make investment decisions.
The survey, conducted by the Harris Poll, found that family offices are increasing their investments to alternatives, but are increasingly looking for opportunities in real estate; collectibles; luxury assets like fine art, jewelry and wine; and sports teams, as those assets can serve as alternative inflation hedges, says Sinead Colton Grant, BNY Wealth’s CIO.
Family offices are also increasingly pursuing direct investments and co-investments. Resource constraints are driving both interest in the use of external consultants and direct investment and co-investment opportunities, according to the report. Risk management, portfolio construction and performance measurement are the services most commonly outsourced by family offices, according to BNY.
Want the latest institutional investment industry?news and insights? Sign up for CIO newsletters. ?
The survey recorded a significant increase in the demand for performance measurement services, as family offices increased their allocations to private assets, with valuations typically more difficult to measure than public assets.
“The resources that you need in order to really build very robust performance attribution across your investments—particularly when you’ve got so much in private assets—that’s a very significant undertaking,” Colton Grant says. “Better to leverage the scale that another player has built.”
Two-thirds of family offices with at least $1 billion in assets plan to increase their exposure to private equity funds over the next 12 months, according to the BNY report.
Investing in AI, and Adopting it
Artificial intelligence has been a core investment theme for family offices, according to BNY, and these firms are leaning heavily into using technology to improve operational efficiency. Family office teams are small, with 58% of survey respondents reporting they have fewer than 20 employees.
“While they’re responsible for deploying a lot of capital, [family offices] may not necessarily have a significant amount of resources—offices with hundreds of people,” Colton Grant says. “Family offices are interested in leveraging AI technology themselves, whether it’s to find better investment opportunities [or] whether it’s to utilize their own resources more effectively, and so I think that’s one of the reasons why you’re seeing it come through as such a theme.”
Some 83% of family office respondents noted that artificial intelligence is one of their focuses over the next five years.
“While recent events have raised fresh questions about fair valuations and the role of AI competition from China, they have not shaken the fundamental investment thesis associated with a transformative technology,” the BNY report stated. “For those taking a five-year view, AI still stands to dominate the remainder of the decade.”
Crypto Curious
In BNY’s 2024 survey, only 6% of respondents said they were exploring, but not actively investing in, cryptocurrency. This year, that figure jumped to 28%, while the percentage of respondents who said they had no exposure to and were not interested in cryptocurrency fell to 24% from 38%.
Attitudes toward digital assets are improving, especially as the administration of President Donald Trump has adopted a more encouraging, lenient regulatory attitude since taking office in January. According to the report, 74% of respondents said the outcome of the U.S. election made them more inclined to invest in cryptocurrency.
A crypto-friendly regulatory environment, as well as the increasing accessibility of crypto exposure through exchange-traded funds, has helped drive acceptance of the asset class by family office investors: “Outright crypto skepticism appears to be a fading phenomenon,” the report stated.
“I think one of the big changes you’ve seen in the U.S. in the last 12 months has been: The environment is becoming more inclusive of crypto,” Colton Grant says. “That certainly helps.”
According to the report, 44% of respondents who are exploring investments in cryptocurrency said the asset class offers good investment opportunities. Approximately 41% are doing so due to interest from the current leadership of family offices, while 37% said they are exploring crypto investments because of interest from family office successors.
Methodology
BNY and the Harris Poll surveyed 282 investment decisionmakers across different countries in January and February. Approximately 56% of respondents were from the U.S., while 44% of respondents were from all other countries.
Approximately 63% of respondents hail from the Americas, while family offices in Europe, the Middle East and Africa accounted for 26% of respondents, and Asia-Pacific-based respondents made up 9% of respondents.
Family offices with at least $5 billion in assets under management accounted for 10% of respondents; those with between $1 billion and $4.9 billion accounted for 24% of respondents. Family offices with between $500 million and $999 million accounted for 22% of respondents, while the largest cohort—those offices managing $250 million to $499 million in assets—accounted for 44% of respondents.
Related Stories:
Appetite for Risk Among Family Offices Expected to Increase
Citi Survey: 60% of Family Offices Have Own CIO
39% of Family Offices Are Crypto Investors or Are Eyeing It
Tags: Alts, BNY, BNY Wealth, Cryptocurrency, family office, Sinead Colton-Grant
#Family #Offices #Lean #Alts #Crypto