Family offices set to take on more risk as alternative allocations rise

Family offices are planning to take on more risk over the next 12 months as alternative asset allocations rise, research from Ocorian has shown.

Its global study of family members and senior executives working for family offices found that 75 per cent expected their risk appetite to increase, including 13 per cent anticipating a dramatic increase.

The primary driver behind this increased risk appetite was greater transparency around riskier asset classes, cited by 61 per cent of respondents.

Almost half (48 per cent) pointed to falling interest rates and the outperformance of AI and tech stocks as factors increasing risk appetite, while 46 per cent said geopolitical instability meant risk attitudes needed to change.

Environmental, social and governance (ESG) principles were highlighted as a key consideration by 99 per cent of family offices, with 79 per cent expecting the focus on ESG principles to increase over the next three years.

All family offices planned greater exposure to private equity over the next two years, with 66 per cent planning to increase allocations by between 25 per cent and 50 per cent.

Furthermore, 96 per cent were planning to boost allocations to private capital, with 93 per cent doing so for private debt, 88 per cent for infrastructure, and 86 per cent for real estate.

“Family offices are increasingly willing to take on more risk and their growing interest in alternative assets is a major reason for that - with plans to increase allocations to major alternative asset classes in general,” said Ocorian head of private client Guernsey & Isle of Man, Andy Bailey.

“It is however striking that nearly half believe that rising geopolitical instability is leaving family offices with little choice but to increase their risk appetite as our research shows.”

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