Family offices bet on the U.S. and stocks for 2025, UBS finds
U.S. family offices, the private investment arms of wealthy families, had 86% of their portfolios in North America in the first quarter, up from 74% in 2020, according to the UBS Global Family Office Report. In the survey of 317 global family offices, no other region or country reported such a high home bias.
UBS conducted the survey from Jan. 22 to April 4, meaning it ended two days after President Donald Trump 's tariff announcement upended global markets. While the stock market has rebounded, investors are still cautious about U.S. assets as trade war negotiations and America's ballooning debt loom large.
However, domestic family offices have not bought the 'sell America' narrative, John Mathews of UBS told CNBC. The U.S. market's history of outperformance is just one factor, he said.
'U.S. family offices are staying home,' said Mathews, who heads the bank's private wealth unit in the Americas. 'In times of uncertainty, you invest in things you understand, you invest in regions of the world that you know and you invest in companies and technologies that you know. I think that's what we're seeing a little bit right now.'
The participating families reported an average net worth of $2.7 billion, with their family offices managing $1.1 billion each.
Time will tell how family offices overseas shift their allocations in the long term, Mathews said. With the exception of European firms, international respondents allocated the lion's share of their assets to North America, peaking at 64% for Latin American family offices.
Only 12% of respondents said they planned to decrease investments in North America over the next five years. Nearly a third (32%) planned to increase their allocation to North America. The most popular region for increasing investment was Asia-Pacific at 35%. Mathews credited interest in the region, which excludes Greater China, in part to India's emerging tech scene.
Global family offices increased their allocation to developed market equities (mainly the U.S.) from 24% to 26% last year. They plan to double down in 2025, raising the allocation to 29%.
American family offices are even more bullish on stocks, planning to ramp up their developed and emerging market exposure from 28% to 32% this year. The report said family offices see stocks and large public companies as an effective way of investing in their key themes, which include artificial intelligence, power and energy generation and health-care advances.
Family offices, Mathews said, are 'leaning a little bit more into the public markets, public equities and fixed income.'
'I think it's simply just the opportunity to have access to maybe a quicker opportunity with the volatility in the market,' he added. 'You know, the U.S. has the deepest, most conservative markets in the world.'
As they're moving into public markets, family offices are stepping back from private equity, at least for now. After years of raising their allocations, peaking at 22% in 2023, family offices trimmed their private equity allocation by 1% last year and plan to cut another 3% this year to reach 18%.
U.S. family offices intend to make an even more significant drawdown in private equity, paring back their 35% allocation in both direct and funds investments by 8%.
Nonetheless, Mathews noted that family offices still have plenty of skin in the game when it comes to private equity. Further, according to the survey, family offices appear positioned to unwind some of these cuts in the future. Over the next five years, more than a third of firms expect to increase their direct private equity (37%). And a similar number are interested in investing in funds or in funds of funds (34%).
'So many of our family offices have a large exposure to private equity and private deals. They're waiting for those exits, and they've been delayed,' he said. 'I think they're just being more selective, but when they see the right one, they typically go all in.'
U.S. family offices plan to make another substantial adjustment to their portfolios, raising their real estate allocations by 8% to 18% while overseas participants only intend to add 1% for a tally of 11%. In the long term, family offices have a mixed outlook, with 29% intending to increase their allocation over the next five years while 19% plan to decrease.
This discrepancy can be attributed to how families made their fortune and where they are located, Mathews said.
'If you're a real estate-focused family office, you may be looking at this as an opportunity to scale back. If you're not a real estate-focused family office, you're probably looking at this as an opportunity to look to buy home debt,' he said. 'Family offices are looking at properties and real estate investments and see big opportunities, especially if there's further declines in those properties.'
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