Global family offices are generally optimistic about investment returns over the next 12 months, although there is a lack of consensus about which asset classes will drive positive performance, a report from Citi Wealth has found.

Its 2025 Global Family Office Report revealed that neutral sentiment dominated across every asset class, with public and private equity having the lowest neutral sentiment at 59 per cent, despite expectations of positive portfolio returns.

Almost all respondents said they expected positive portfolio performance over the year ahead, with 38 per cent anticipating returns of 10 per cent or more, while just 2 per cent expected negative returns.

Citi Wealth argued that the general positive sentiment could be explained by potential US deregulation, interest rate cuts, and advances in artificial intelligence.

Asset allocation

Opinions were split on which asset class would produce positive returns, with 29 per cent bullish on global developed equities and 12 per cent bearish, 26 per cent bullish on emerging market equities and 15 per cent bearish, and 18 per cent bullish on digital assets and 19 per cent bearish.

This trend was similar across most asset classes, including hedge funds, private equity, private credit, commodities, fixed income, and real estate.

Asset allocations had largely remained steady, with family offices making fewer changes than last year as they wait for greater clarity on trade policy.

Of those implementing changes, bullish moves predominated as private equity saw the most positive activity.

The report noted that US tariff announcements earlier this year had triggered swift, calculated adjustments to improve portfolio resilience, with 39 per cent of family offices preferring active management.

Family offices were also found to have been pivoting towards perceived defensive asset classes and geographies, alongside hedging strategies.

Risks and concerns

The top concern among family offices was global trade disputes, cited by 60 per cent of respondents, followed by US/China relations (43 per cent), and a resurgence of inflation (37 per cent).

Citi Wealth added that geopolitical tensions and government initiatives to attract capital were driving interest in asset location and a re-evaluation of jurisdictions.

Looking at the risks family offices were facing, 70 per cent cited those related to investments, followed by operational (37 per cent) and family-related risks (33 per cent).

Family offices generally reported strengthening risk management, but 52 per cent admitted being underprepared to address cybersecurity and 45 per cent were worried they were underprepared for geopolitical risks, with resource constraints remaining a significant challenge.

Although family offices had made progress in professionalising their investment function, further improvement was required in operational risk management, cybersecurity, and leadership succession planning.

To manage their increasing responsibilities while maintaining cost efficiency, many family offices were considering external suppliers but with decision-making authority largely remaining in-house.

Commenting on the report, Citi Wealth Global Family Office Group head, Hannes Hofmann, said: "These are exciting times for family offices worldwide. These sophisticated clients are finding new ways to address their families’ ever-increasing expectations.

“Our 2025 report highlights how they are refining priorities, reimagining their operations and seeking to build resilient portfolios. We are proud to partner with them, drawing upon Citi’s global reach and deep resources to help them seize potential opportunities and achieve their ambitious goals."

Citi Wealth head of integrated client engagement, Dawn Nordberg, noted that family offices remained highly focused on direct investing, as they seek exposure to the key transformative technologies and attractively valued companies across sectors.

"We have a specialist team that works alongside colleagues from Citi’s world-class investment bank,” Nordberg continued. “Our mission is to enable our sophisticated family office clients to access proprietary private capital raises, asset divestitures and thought leadership across industries and geographies to support their direct investing."

Citi Wealth head of global family office advisory, Alexandre Monnier, added: "Our survey reveals ongoing professionalisation among family offices, particularly in the investment function.

"It also identifies areas where further development is crucial, such as risk management and talent acquisition for non-investment services. Our findings can help frame the discussion for those seeking to formalise their operations, prepare their family’s future leaders and preserve and grow generational wealth."

---