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According to Citi Private Bank’s 2024 Global Family Office Survey, family offices are feeling more bullish than ever. A staggering 97% of family offices expect positive returns this year, with nearly half anticipating double-digit gains. This optimistic outlook is leading to an increase in risk appetite among family offices, a trend that has not been seen in years.
One key area of interest for family offices is private equity. The survey revealed that 47% of family offices plan to increase their allocation to direct private equity in the next 12 months, making it the most favored investment category. Additionally, interest in developed-market equities, particularly in the U.S., is on the rise, with 39% of family offices planning to increase their exposure to public stocks.
With interest rates decreasing, family offices are also turning to fixed income investments. Half of family offices surveyed added to their fixed-income exposure last year, and a third plan to increase their holdings even further this year.
Despite their optimism, family offices are mindful of risks in the market. Concerns about interest rates, U.S.-China relations, and market overvaluation are top of mind for many family offices. However, family offices stand out for their appetite for alternatives, such as private equity, venture capital, real estate, and hedge funds, which now make up 40% of their portfolios.
One intriguing trend in family office investments is the focus on artificial intelligence (AI). Leading family offices, including those of Jeff Bezos and Bernard Arnault, are making significant investments in AI startups. AI has emerged as the top investment theme for family offices this year, with over half of family offices already having exposure to AI in their portfolios.
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