Family Offices double down on technology and private equity

By Vriti Gothi

Family offices around the world are navigating an increasingly complex landscape shaped by geopolitical tensions, trade uncertainties, and rapid technological change. A recent survey of 346 family offices across 45 countries by Citi Wealth reveals how these sophisticated investors are adapting their strategies to safeguard portfolios while pursuing growth opportunities.

The survey highlights a notable resurgence of first-generation wealth, particularly in Europe, the Middle East, and Africa, where 56% of family offices remain under first-generation control. In contrast, the Asia Pacific region sees 43% of wealth managed by second-generation families, reflecting a more mature market. Hannes Hofmann, Head of Citi Wealth’s Global Family Office Group, remarked, “These are exciting times for family offices worldwide—especially in the Middle East. A high proportion of first-generation families continue to control wealth, reflecting a resurgence of wealth creation in the region.” This dynamic is further reinforced by an influx of high-net-worth individuals relocating to hubs such as the UAE, strengthening the region’s position as a global centre for family offices.

Global trade disputes emerged as a primary concern for 60% of respondents, followed closely by U.S.-China relations and inflationary pressures. These challenges have prompted family offices to reassess asset location and jurisdictional exposure. Despite market uncertainty, most maintained stable asset allocations, favouring measured adjustments rather than broad portfolio shifts. Private equity activity was particularly notable, with bullish moves dominating among those making changes.

Direct investment remains central to family office strategies, with 70% actively engaged in deals and 40% reporting increased activity over the past year. This reflects strong confidence in their ability to identify opportunities that generate meaningful returns. At the same time, adoption of artificial intelligence has doubled since the previous survey, particularly for operational automation and investment analytics, signalling a growing reliance on technology to enhance decision-making and efficiency.

While progress has been made in professionalising investment functions, gaps remain in operational risk management, cybersecurity, and succession planning. About half of family offices acknowledged being underprepared for cyber, personal, and geopolitical risks. Outsourcing is increasingly considered to manage responsibilities efficiently, although strategic decision-making continues to reside largely in-house.

Despite these challenges, sentiment remains optimistic. Nearly 40% of family offices anticipate portfolio returns of 10% or more in the next 12 months. Dawn Nordberg, Head of Integrated Client Engagement at Citi Wealth, highlighted the focus on forward-looking strategies: “Family offices globally remain highly focused on direct investing, as they seek exposure to the key transformative technologies of tomorrow and attractively valued companies across sectors.”

The survey underscores a dual approach among family offices: balancing resilience with the pursuit of growth. By maintaining steady portfolios, embracing technological innovation, and strategically engaging in direct investments, family offices are positioning themselves to capitalize on emerging trends while securing generational wealth for the future.