Map of family offices in 2025: all eyes on the trade war
27 MAY, 2025
UBS has published today its Global Family Office Report 2025, with detailed information from 317 family offices in over 30 markets around the world. The average net worth in the survey was 2.7 billion dollars, with family offices managing an average of 1.1 billion dollars, making this report the most comprehensive and authoritative analysis of this influential group of investors. The survey was conducted from January 22 to April 4, 2025.
"In a time of increased volatility, fears of a global recession and after an almost unprecedented market sell-off in early April, our latest report serves as a good reminder that family offices around the world are, above all, pursuing a steady and long-term approach, as they focus on preserving wealth over the coming generations", said Benjamin Cavalli, Head of Strategic Clients at UBS Global WM. "Even with the survey largely conducted in the first quarter, family offices were already very aware of the challenges posed by a global trade war, identifying it as the biggest risk of the year. However, in interviews conducted after the market correction triggered in early April, they reiterated their strategic allocation of diversified assets and for all types of environment."
"We are pleased to say that the size of our database has allowed us to conduct a deeper regional analysis than ever before", said Yves-Alain Sommerhalder, Head of GWM Solutions at UBS Global WM. "While the global macroeconomic and political environment continues to be marked by rapid changes and a high degree of uncertainty, this survey offers a vision of what we can expect in the next five years. And most importantly, it provides an indication of the mindset of family offices around the world, their goals, preferences and concerns."
The trade war is the biggest concern for 2025
When asked about the biggest threats to their financial goals in the next 12 months, more than two-thirds (70%) of family offices highlighted a trade war. The second biggest concern for more than half (52%) was a major geopolitical conflict. Over the next five years, those concerned about a major geopolitical conflict increased to 61% and 53% were worried about a global recession due to potentially serious trade disputes. Alerted to the dangers of government debt, 50% of family offices were concerned about a debt crisis, according to the survey.
Despite the uncertainties, at the time the survey was conducted, 59% of family offices planned to assume the same amount of portfolio risk in 2025 as in 2024, remaining faithful to their long-term investment objectives. However, 29% highlighted the difficulty of finding the right strategy to diversify risk, due to unstable correlations. As a result of this, 40% see the selection of managers and/or active management as the most effective way to improve portfolio diversification, followed by hedge funds (31%). The same percentage is increasing the weight of illiquid assets (27%), and more than a quarter (26%) are increasing high-quality, short-duration fixed income. Precious metals, used by almost a fifth (19%) globally, have seen their use in investment grow above other assets compared to the previous year, with 21% anticipating a significant or moderate increase in their allocation over the next five years.
Rebalancing of asset allocation towards liquid markets
A rebalancing is taking place in the strategic asset allocation for the coming years within this unstable era for trade and the global economy. Family offices are increasing their weightings in stocks and bonds of developed markets, as they seek liquid opportunities for capital growth and yield in a volatile environment. Increasingly, there are opportunities to access secular growth trends in listed stocks that were previously mainly limited to private markets, ranging from generative artificial intelligence stocks to energy, resources, and longevity stocks.
Allocations of developed market stocks increased to 26% in 2024 and family offices planning to make changes in 2025 intend to increase this weight to 29%. Over the next five years, nearly half (46%) anticipate a significant or moderate increase in their allocation to developed market stocks. Conversely, less than a quarter (23%) see themselves doing the same in their developed market fixed income weights.
After a prolonged period of disappointing returns, and economic growth not reflected in stock market returns, family offices in the US and Europe are cautious with emerging markets, more than their peers in Asia-Pacific, Latin America and the Middle East. Globally, family offices allocated only 4% to developing market equities in 2024 and 3% to developing market bonds, but see the greatest opportunity in the next five years in India and China. When it comes to barriers to investing in these regions, geopolitical concerns were most frequently cited (56%), as well as political uncertainty and/or sovereign default risk (55%). Currency devaluations and/or inflation (48%), as well as legal uncertainty/lack of regulations (51%) proved to be almost equally deterrent factors.
While family offices are reducing exposure to illiquid assets, allocations to private markets remain relatively high in 2024 at 21%. However, those planning to change allocations in 2025 intend to reduce this weight to 18%, driven mainly by direct investments, as both low capital market activity and new investments are slowing portfolio divestments, while higher interest rates make financing more expensive.
Continuing the trend of recent years, North America (53%) and Western Europe (26%) remain the preferred investment destinations, claiming four fifths of all assets. Allocations to Asia-Pacific (excluding Greater China) and Greater China fell to 7% each.
The future of family offices
In the midst of the largest wealth transfer in history currently underway, just over half (53%) of family offices globally have succession plans for family members. However, others still have no succession plans, mainly because the owners believe they have plenty of time to design the same. More than a fifth (21%) stated that the owners have not decided how to divide their wealth, while almost the same number (18%) indicate that the owners did not have time to discuss it.
In the case of families that have succession plans, the biggest challenge remains ensuring the transfer of wealth in the most tax-efficient manner, according to almost two-thirds (64%). More than four out of ten (43%) see another great challenge in preparing the next generation to assume wealth responsibly and in line with family objectives, with only 26% consulting the next generation about the succession plan from the beginning.
Regional findings:
United States
Alternative investments were the preferred asset class of US family offices (54%), with 27% in private equity, 18% in real estate, and 3% in private debt, according to the survey. In comparison, 46% had investments in traditional asset classes, with most in stocks (32%), followed by fixed income (9%) and cash (5%). Their portfolios had the greatest geographical tilt towards North America (86%), with only 7% in Western Europe and 3% in Asia-Pacific (excluding Greater China). Forty-seven percent of the portfolios are actively managed.
Latin America
Family offices in Latin America preferred traditional asset classes (71%), with 34% in stocks and 31% in fixed income. The share of alternative asset classes was 29%, with the largest investments in private equity (17%), followed by cash (6%) and real estate (6%). Sixty-four percent focused their regional asset allocation on North America, followed by Latin America (15%), Western Europe (11%) and Asia-Pacific (excluding Greater China) at 5%.
Switzerland
In Switzerland, family offices had a preference for traditional asset classes (56%), with 34% in stocks and 13% in fixed income. Forty-four percent was invested in alternative asset classes, including 16% in private equity, 12% in real estate, and 5% in hedge funds. Western Europe was the preferred regional asset allocation (53%), followed by North America (39%) and Asia-Pacific (excluding Greater China) at 4%. More than two-thirds (68%) had actively managed portfolios.
Europe (excluding Switzerland)
In Europe, family offices preferred traditional asset classes (51%), with the majority in stocks (30%), followed by fixed income (15%) and cash (6%). The participation of alternative asset classes was 49%, led by private equity (27%) and real estate (11%). Like their US counterparts, they had a preference towards their local market, with 44% indicating an asset allocation in Western Europe, followed by the US (43%) and Asia-Pacific (excluding Greater China) at 5%.
Middle East
In the Middle East, the distribution of alternative and traditional asset class allocation was evenly divided (50%), with the majority in stocks (27%), followed by private equity (25%), fixed income (16%) and real estate (14%). North America is the preferred region in terms of asset allocation (55%), followed by Western Europe (21%) and the Middle East (14%). While Greater China currently ranks fourth (4%) in terms of geographical allocation in portfolios.
North Asia
Sixty percent of family offices in North Asia preferred traditional asset classes, with 27% in stocks and 21% in fixed income. Among alternative asset classes (40%), private equity was the preferred investment (15%), followed by real estate (10%) and hedge funds (9%). Forty-three percent preferred North America for their asset allocation, with Greater China in second place (31%) and Asia-Pacific (excluding Greater China) in third place with 19%.
Southeast Asia
Seventy percent of family offices in Southeast Asia preferred traditional asset classes, with 31% in stocks and 27% in fixed income. The participation of alternative asset classes (30%) was divided between cash (12%), private equity (10%) and private debt (6%). Fifty-six percent had North America as their preferred regional asset allocation, followed by Asia-Pacific (excluding Greater China) at 21% and Western Europe at 12%. Thirty-three percent agreed with other regions that Greater China is the greatest opportunity to obtain investment returns in emerging markets, followed by India and Taiwan, both at 28%.
