Family offices are shifting their investment strategies to target more exposure to global developed equities over the next year, as well as to hedge funds, private equity and real estate, according to Citi Wealth research.
Over the next 12 months, 37% of family offices reported they expect to increase their allocation to global developed market equities, while 28% said they are eyeing higher hedge fund allocations, according to Citi Wealth’s “2026 Global Family Office Report.” The findings are based on responses to a 50-question survey taken by 351 of Citi Wealth’s family office clients.
“Public equity allocations should remain anchored to earnings durability and balance-sheet strength,” the report stated. “In an environment where returns are increasingly driven by fundamentals rather than valuation expansion, quality matters more than ever.”
Over the coming year, more family offices are planning to add to their equities and alternatives portfolios than to reduce them, while a majority of respondents reported expecting to decrease their holdings in private credit, digital assets and cash.
More than one-quarter of direct private equity investments and private equity funds are expected to grow, with 27% and 26%, respectively, of the family offices expecting growth, followed by real estate and emerging market equities, each of which was cited by 25% of the family offices responding.
Family office respondents reported they plan to cut back on digital assets, cash and global developed high-yield fixed-income investments. Among the respondents, 14% said they are looking to exit some of their digital asset positions, compared with 3% that said they will increase investments in the asset class. Meanwhile, 17% said they will cut their developed-market high-yield fixed-income investments, compared with 6% who are looking for more. That said, the vast majority of family office respondents said they will maintain their current allocation to the assets.
North America Remains the Top Region
On a geographic basis, family offices continue to favor North American assets, with 39% saying they will increase allocations to the region over the next 12 months, while only 6% anticipated reducing their exposure. Asia Pacific, excluding China, followed, with 29% of respondents planning to add to their exposure, and only 3% that reported plans to decrease their presence in the region. The sentiment toward European investments was more mixed among respondents, with 20% wanting more and 15% wanting less.
However, family offices are not showing much added interest in Latin America, the Middle East or Africa, with 45%, 58% and 72% of respondents, respectively, saying they do not want any exposure in those regions.
Inflation Concerns
The survey also found that rising inflation is by far family offices’ biggest concern, cited by 63% of respondents, up from 37% one year earlier. Interest rate shifts were named by 44% of offices as their main worry, up from 30% in 2025, with 38% reporting being most nervous about the stability of the global financial system, compared with 29% last year.
It it is a far cry from one year ago, as trade disputes were cited as a concern by fewer family offices, with only 18% saying it was their top concern, plunging from 60% in 2025.
More Adept at Using AI
The report also found that family offices are becoming more institutional in how they invest and more sophisticated in their risk management, which “shows up clearly in artificial intelligence.” According to Citi Wealth, family office managers are moving from AI experimentation to broader implementation at “a faster pace than many expected.”
What was merely exploratory a year ago is in operation now, the report stated. The research found that family offices are using AI for investment analysis, information management, reporting, workflow automation and decision support processes.
“In our conversations with clients, they cite benefits such as faster information processing, improved efficiency, and enhanced due diligence capabilities,” the report stated. “For now, the emphasis is on productivity rather than alpha generation.”
However, the report also acknowledged that AI adoption has been uneven.
Tags: Artificial Intelligence, Asset Allocation, Family Offices, Risk