2024 Outlook

The financial markets are facing one of the most turbulent periods in decades. Global inflation and interest rates at a historic high, geopolitical tensions and the rise in protectionism are leaving some feeling underwhelmed, however, family offices are holding strong with total AUM expected to exceed £1.5 trillion by 2027.

Here are four important trends shaping family offices in 2024:

1 Asset allocation - According to Goldman’s 2023 family office survey, families on average continue to hold outsized allocations to alternatives and are expected to decrease their cash holdings within the next 12 months. They also expect to increase their allocation to private equity and fixed income in the next 12 months. While Goldman's research suggests a steady approach to geographic allocations, with a focus on the U.S. and other developed markets, UBS’s 2023 family office report suggests a large cohort will increase its focus in Western Europe and the wider Asia-Pacific region over the next five years. Family offices tend to primarily invest through managers to mitigate some risk through diversification.

2 Investments into Private Equity - Private equity has been one of the main asset classes in which investments have grown in recent years, both directly in private companies and through private equity funds. Venture capital is included in this broad definition.

3 Volatile Digital Assets - Although many families still see the lack of regulation as an obstacle, allocations in cryptocurrencies have been steadily increasing. That being said, many investors remain sceptical to which regulation and cybersecurity will help better shape the investment landscape.

4 Succession Planning - The great wealth transfer remains a priority for families moving into this year and beyond to ease the transition of investment operations for their digital native successors in the coming years.