More than four in five (82 per cent) family offices are planning to increase their investment risk appetite in the year ahead, with improved regulation of riskier assets the primary driver, research from Ocorian has revealed.

The study of global family offices also found that 12 per cent of family office professionals were expecting a dramatic increase in risk appetite over the coming year.

Of those who expected a rise in investment risk appetite, 62 per cent said increased regulation around riskier assets was a key reason, while 55 per cent cited their belief that inflation had peaked or will peak soon.

Just under half (47 per cent) pointed to increased transparency around riskier assets and 44 per cent said they believed that markets were set to recover.

Almost all (99 per cent) family office professionals agreed that the switch to investing in alternative assets among family offices was a long-term trend.

The Middle East was the jurisdiction forecast to be most likely to increase exposure to alternatives, being cited by 51 per cent of respondents, while 40 per cent selected the EU and 38 per cent chose the UK.

More than two thirds (68 per cent) believed family offices are most likely to use funds as their preferred structure, compared with 66 per cent selecting GPLP structures and 44 per cent choosing SPVs.

Infrastructure and private debt were forecast to be the alternative asset classes seeing the largest increases in allocations over the next two years.

Over a quarter (26 per cent) of respondents predicted allocations to infrastructure to increase by 50 per cent or more, while 23 per cent expected the same level of increase in allocations to private debt.

Ocorian stated that the recent strong performance of alternative asset classes was seen as the key attraction for family offices ahead of the diversification benefits and greater transparency around the asset classes.

It also found that alternative assets’ ability to provide income, increased choice in the sector, and their inflation-proofing qualities were also attractive.

“Family offices’ appetite for risk is increasing rapidly after many years when many were heavily focused on cash and took a very cautious approach to investing,” commented Ocorian global head of private client, Annerien Hurter.

“The long-term trend of family offices increasing their exposure to alternative asset classes is certainly a factor in the growing appetite for risk and it is clear that improvements in regulation around riskier assets is proving popular with family offices.

“It remains essential for advisers and service providers alike to deeply understand the unique risk appetite and governance needs of each family, ensuring transparency and trust in every decision.”

Bovill Newgate partner, Mark Spiers, added: "Regulation is playing an increasingly critical role in shaping the investment strategies of family offices. The findings presented in Ocorian’s survey highlight how improvements in the regulatory landscape, particularly around riskier assets, are enabling family offices to explore new opportunities while still ensuring robust governance frameworks.

“It’s encouraging to see that family offices are becoming more comfortable with increased risk, particularly in alternative asset classes such as private debt and infrastructure, as they recognise the potential benefits of diversification and enhanced transparency.

“As regulatory oversight continues to evolve, it's essential that family offices work closely with their advisers to navigate this complex environment and ensure that all investment decisions are aligned with both their long-term objectives and regulatory obligations."

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