Family offices are planning to increase their exposure to alternative assets over the next 12 months, with private equity proving the most popular, according to a study by Ocorian.

It found that 41.1 per cent of family offices were expecting to increase their allocation to private equity ‘dramatically’, while 35 per cent were planning a slight increase.

Only 1.3 per cent of family offices were planning to decrease their private equity allocation.

More than a third (33.7 per cent) were expecting to dramatically increase their exposure to real estate in the coming year, while dramatically increased allocations to private debt, infrastructure, and hedge funds were cited by 32.7 per cent, 32.4 per cent, and 30.7 per cent of respondents respectively.

Private debt was the alternative asset class with the highest proportion of family offices planning an allocation reduction (3.2 per cent), followed by infrastructure (2.3 per cent).

Ocorian noted the long-term trend of family offices turning to alternatives and asked respondents which vehicles they expected this growth in exposure to be structured in to.

The most popular response was funds, cited by 68.4 per cent of those surveyed, followed by general partners/limited partners (GP/LP) (65.5 per cent), special purpose vehicles (SPV) (44 per cent), and ‘other’ (0.3 per cent).

Family offices were asked the reasons behind their increased allocations to alternatives, with the strong performance of the asset class being the most popular reason.

This was followed by the diversification benefits of alternatives, the greater transparency of the asset classes, and the ability of some alternative asset classes to provide a steady and attractive income.

While the research found that alternatives were increasingly popular, exposure to traditional asset classes were still expected to rise over the next 12 months.

More than four in 10 were planning dramatic increases to investment grade fixed income (41.7 per cent) and European equities (41.4 per cent).

However, just 25.6 per cent and 16.8 per cent were expecting dramatic increases to US equities and non-investment grade fixed income respectively.

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