Report Details Billionaire Family Office Investments
A recent report detailed where billionaire family offices allocated their capital before the end of last year. The analysis shows a continued trend of diversification into alternative assets, private equity, and direct investments, providing insight into the strategies of high-net-worth individuals.
The number of single-family offices surged by 31% from 2019 to 2024, now totaling an estimated 8,030 worldwide. This growth is projected to continue, with predictions of over 10,720 offices by 2030, a 75% increase over the decade. Total assets under management are also expected to climb, from $3.1 trillion to $5.4 trillion by 2030. This expansion is driven by a boom in global wealth creation, with the estimated wealth of families utilizing family offices jumping from $3.3 trillion in 2019 to a projected $9.5 trillion by 2030. While North America has historically led this growth, the Asia-Pacific region is expected to see faster creation of new family offices in the coming years. A significant trend is the move towards direct investments, with over half of the world's family offices now investing directly in companies. This strategy offers greater control, transparency, and lower fees compared to traditional fund investing. The acceleration of this trend is particularly noticeable among newer family offices established since 2015. Technology and healthcare are prime targets for these direct investments. About 61% of family offices that invest directly are involved in the tech sector, and 44% allocate to healthcare. This reflects a broader interest in "digitization" and "increasing longevity" as key investment themes. Beyond direct deals, family offices are also increasing their allocations to other alternative assets. Hedge fund allocations rose from 4% in 2021 to 7% in 2022. There is also a growing interest in private credit, with the percentage of family offices having no exposure dropping from 36% to 26% in two years. In response to global uncertainty, geopolitics has become a primary concern for these investment powerhouses. This has led to strategic shifts in asset allocation, with some family offices increasing their exposure to precious metals and relying more on active management and hedge funds for diversification. There is also a planned increase in allocations to Western Europe for the first time in several years.
