Wealthy Families Shift Focus to Risk Assets, Citi Survey Reveals

A recent survey of over 338 family offices shows that the world’s wealthiest families are increasingly directing their portfolios toward riskier assets rather than holding cash. According to Citi Private Bank’s 2024 Global Family Office Report, 43% of respondents increased their exposure to public and private equity, while half raised their allocations to fixed income. Despite concerns over high interest rates, real estate, which is sensitive to interest rate fluctuations, remained stable for the second consecutive year.

This trend is notable as it reflects the investment attitudes of some of the wealthiest individuals globally. Family offices, typically established by billionaires or individuals with assets exceeding $500 million, are becoming a common way for the ultra-wealthy to manage their finances, explained Richard Weintraub, head of Citi Private Bank’s Family Office Group in the Americas.

Weintraub noted that last year, more than 95% of clients anticipated strong returns, which materialized over the past 12 months. He expressed confidence in the continued optimism of these sophisticated family offices, stating that they expect another bullish year in the markets.

As the number of ultra-wealthy individuals grows, so does the prevalence of family offices. Currently, family offices manage an estimated $5.5 trillion in wealth, up from $3.3 trillion in 2019. Projections by Deloitte suggest this figure could grow by 189% by 2030.

Defining exactly what a family office entails, however, remains a challenge. Weintraub compared the term “family office” to describing a “red car”—it doesn’t specify the size or structure. Family offices vary widely in size, from small teams to operations employing over 100 advisors. The primary reason for establishing a family office, Weintraub explained, is control over financial assets.

While billionaires often work with multiple financial advisors, managing assets through a family office reduces the risk of over or under-allocating wealth, enabling better long-term asset preservation across generations. Family offices, which handle a range of concerns including financial investments, philanthropy, and art collection, provide a centralized way for wealthy families to manage their affairs efficiently.

Weintraub highlighted the advantage of having an internal investment team that follows the specific guidance set by the family, helping to streamline and control various aspects of wealth management within a single entity.

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