The World Trade War poses the biggest investment risk for family offices in 2025, followed by major conflicts and higher inflation in the global political conflict, which, according to the latest results from the UBS Global Family Office Report 2025, provides insights from 317 single family offices in over 30 markets around the world.
Family Office is a private company founded by wealthy families, overseeing and managing finance and investment.
Hedge funds that are advantageous for managing risks
When asked about threats to financial goals for the next 12 months, three-thirds (70%) of family offices highlighted the trade war. The second biggest concern of over half (52%) is the major geopolitical conflict, and then Higher inflation. Looking five years away, people worried about major geopolitical conflicts rose to 61%, while 53% were worried about the global recession. Research shows that 50% of family offices were worried about a possible debt crisis, citing the risk of an increase in government borrowing.
Despite these concerns, 59% of family offices plan to take the same amount of portfolio risk in 2025, and remain true to their investment goals. But 29% of them pointed it out Unpredictable “traditional” safe shelter assets A period of global economic uncertainty. The survey was conducted from January 22nd to April 4th, 2025.
As a result, 40% believe they rely on manager choice and active management. Effective ways to maintain portfolio diversification followed by hedge funds (31%). precious metalsinvested in almost five-fifths of family office portfolios worldwide (19%), with 21% expecting a significant or moderate increase in allocation over the next five years.
There are few emerging markets in the portfolio
During periods of uncertainty in trade and the global economy, changes in strategic asset allocation are underway. The developed market equity allocation will average to 26% in 2024, with family offices planning to make changes in 2025 aiming to increase this to an additional 29%. Over the next five years, almost half of family offices (46%) expect a significant or moderate increase in allocations to stocks in developed markets.
At the same time, over the long term of disappointing returns, US and European family offices are wary of emerging markets as economic growth is not generally converted into stock market returns. More than their peers in Asia Pacific, Latin America and the Middle East. Globally, Family Offices were allocated only 4% to market equity development in 2024 and 3% to market bond development, but it is most likely to increase exposure to India and China over the next 12 months. Barriers to investing in emerging markets include geopolitical concerns (56%), political uncertainty, and the risk of defaulting sovereignty (55%).
Overall, continuing the trends in recent years, North America (53%) and Western Europe (26%) continue to be favored investment destinations, claiming almost four-fifths of all assets. Allocation to the Asia-Pacific region (excluding Great China) and Dahua each fell to 7%.
Active management preferences
On average, a larger share of family office equity investments is actively managed, with over a third (36%) being managed passively, according to the report. However, this finding varies from region to region. US Family Offices (53%) were the lowest in the Asia-Pacific region (22%). While maintaining a high allocation for active management, it appears that some family offices are considering rebalancing their portfolios. Approximately 43% of European-based people investing in stocks, like 38% in Latin America, are looking to invest more in pure index-based strategies.
When it comes to different styles of investment, family offices with aggressively managed stock investments are diversified across a variety of styles. Over 6 in 10 people (62%) support growth, seeking similar numbers (58%) and quality (62%).
Size is also a factor for 10 in ten (43%) family firms that choose actively managed stock investments. This finding suggests that despite the outperformance of large-scale cap equity in recent years, they could still invest in small cap caps.
Scramble for the inheritance of wealth
One of the main tasks of a family office is to ensure an effective transfer of generational wealth. A report by UBS shows that half (53%) of family offices around the world have family wealth succession plans. A fifth (21%) say that the owner has not decided how to divide his wealth, but indicates that the owner has not yet discussed it.
When families implement succession plans, the biggest challenge is to ensure wealth transfer in the most tax-efficient way, following almost two-thirds (64%) of those surveyed. More than four in ten (43%) believe they are preparing the next generation to take on wealth responsibly and in line with the purpose of their families. Only 26% of people consult with the next generation about their succession plans from the start.
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