Family offices increased their allocations to equities and hedge funds in Q2 2024, while further reducing their cash holdings, according to Citi Private Bank’s Family Office Investment Report.

It revealed that several risk assets had rallied in the second quarter of 2024, particularly equities.

This continued the trend from the first quarter of the year, in which Citi observed its family office clients making broad-based additions to equity holdings.

As at 30 June 2024, Citi’s family office clients had an average 35 per cent equal-weighted asset allocation to equities.

Within equities, their preferences tilted towards developed large caps, the report noted, with all regions except North America reducing their allocations to small and mid-cap equities.

Exposure to emerging markets equities was down or steady across all regions.

Meanwhile, cash holdings fell to an average allocation of 28.2 per cent, and hedge fund allocations rose to an average of 3 per cent.

Citi’s report found there was a “modest renewal of interest” in fixed income in Q2, sitting at 22.4 per cent average asset allocation at the end of June.

Within fixed income sub-asset classes, flows were found to be mixed across all regions with no clear preference.

Activity in commodities was “muted” during the second quarter of 2024, with an average allocation of 0.7 per cent.

Commenting in the foreword of the report, Citi global family office group head, Hannes Hofmann, and global investment lab head, Shu Zhang, said: “Many risk assets rallied in the second quarter of 2024, particularly equities.

“This followed our family office clients’ broad-based additions to equity holdings in the first three months of the year. By contrast, they were more ambivalent about fixed income, which has since done somewhat worse.

“During the second quarter, our family office clients also continued to allocate more to equities but also to hedge funds.

“There has also been a modest renewal of interest in fixed income. We shall, of course, be closely watching how these moves play out over the coming quarters.”

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