Geopolitical uncertainties are forcing family offices out of U.S. equities, diversifying into cash and liquid alternatives, according to BlackRock’s annual?Global Family Office Survey.
Global family offices find themselves in “risk-management mode,” as 68% reported scrambling to diversify their assets.
Some 84% of respondents said geopolitical uncertainty is the most important issue for them and is a critical factor in their capital allocation decisions.
Alternatives are benefiting from increased allocations and now make up 42% of single-family office portfolios, up from 39% in 2022, according to the data.
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Private credit and infrastructure are the most-favored alternatives. In addition, 32% of family offices reported plans to increase their allocations to private credit, and 30% said they intend to raise their infrastructure allocation in2025-26.
Infrastructure is also gaining strong momentum, with 75% of respondents reporting they feel positive about the prospects for the asset class.
Armando Senra, BlackRock’s head of institutional business in the Americas, said with 60% of family offices pessimistic about the global outlook, confidence has been further shaken by new U.S. tariffs.
“Family offices are now prioritizing diversification, liquidity, and structural reassessment of risk as they build resilience in their investment portfolios,” he said in a statement.
Many of the 175 single-family offices surveyed, which collectively have $320 billion in assets, want to collaborate with external partners, especially when it comes to private markets. Many cited
gaps in their internal expertise on reporting (57%), deal-sourcing (63%) and private-market analytics (75%).
Almost one-quarter (22%) reported using an outsourced chief investment officer or would consider doing so.
The majority of respondents said they would also consider using artificial intelligence for a variety of tasks from risk management to cash-flow modelling.
Finally, 45% reported being more likely to invest in technology firms building AI solutions, while 51% said they were interested in investment opportunities they believe will benefit from the growth in AI, and 33% reported planning to deploy AI tech internally to improve their investing process.
This?article?originally appeared in our sister publication,?Financial Standard, which, like CIO, is owned by ISS STOXX.
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Tags: BlackRock, Family Offices
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