Global Family Offices Unfettered by Military Conflicts, Recession Fears

The more things change, the more they stay the same.

This year may have felt like a rollercoaster, with ups and downs in the market, the White House’s shifting tariff regime and bubbling geopolitical tensions. But while the world looks different than it did two years ago, ultra-rich family office clients are singing the same old risk-on tune. Globally, family office asset allocations today bear a striking resemblance to those of 2023, according to new Goldman Sachs data. Especially in hectic times, it’s best to remember that advising is a long game.

“The world always feels like a volatile place,” Tony Pasquariello, head of hedge fund coverage at Goldman Sachs, said at a press conference. “But in general, there’s been these brief flashes of volatility that did not last very long.”

Stay in the Game

The areas where family offices see the greatest investment risks today include geopolitical conflicts, political instability and economic recession, per Goldman data. Nearly two-thirds of offices view the wars in Ukraine and the Gaza Strip as well as ever present US-China tensions as potentially negative for clients. Relatively speaking, offices in the Asia Pacific region are the most concerned. 

Such concerns, however, haven’t really altered how family offices manage assets:

• The average family office now puts 31% of its allocations toward public equities, up from 28% in 2023. While private equity allocations remain significant, they dropped from 26% to 21% in that time. 
• Overall, 42% of allocations are in alternative assets, and 38% of family offices said they expect to increase their positions in public equities, highlighting clients’ appetite for risk. 
• Meanwhile, allocations to cash, fixed income, private real estate and infrastructure, hedge funds, private credit and commodities have stayed mostly flat. 

“That really comes down to this realization from family offices that the only way to grow and preserve your wealth and preserve your purchasing power over time is to beat inflation,” said Sara Naison-Tarajano, head of private wealth management capital markets at Goldman. “US equities have historically been the best way to beat inflation.”

Home Court Advantage. The outlook among family offices in the Americas is so positive that more than a third of firms are not positioning their portfolios to handle extreme or unexpected market events. However, in the Asia Pacific and Europe, Middle East and Africa regions, just 12% and 14% are not positioned for tail risk, respectively, favoring geographic diversification. “The US still is overwhelmingly the place where families are invested, but the next most likely place is their home country,” said Meena Lakdawala-Flynn, co-head of global private wealth management at Goldman.