So, what are family offices focused on this year and into the future? Here are the seven major areas they’re prioritizing:
1. Family Office Trends: Shifting from Cash to Assets
Family offices are no longer playing it safe with large cash reserves. This year, there’s been a significant move from cash to more growth-oriented assets. Nearly half (43%) have increased their exposure to both public and private equity. Allocations to cash have dropped, with only 31% of family offices maintaining significant liquidity reserves, down from 47% last year. This move signals their optimism, as 97% expect positive portfolio returns over the next 12 months, with many anticipating returns above 10%.
2. Private Equity Takes Center Stage
Private equity continues to dominate family office portfolios, with direct investments and private equity funds leading the way. Around 47% of family offices are particularly bullish on private equity, and 75% are actively engaged in direct deals. This focus on private equity offers greater flexibility and return potential, especially for family offices seeking growth in areas like technology, healthcare, and real estate, including multifamily investments. Multifamily real estate, in particular, remains an attractive sector due to its stability and potential for consistent cash flow.
3. Real Estate as a Stable Asset Class
Speaking of real estate, family offices aren’t ignoring this tried-and-true investment. Despite rising interest rates, allocations to real estate have remained remarkably stable, with 55% of family offices keeping their real estate exposure unchanged. Multifamily real estate continues to be a key focus, as it offers both diversification and income stability in uncertain markets. Many family offices view multifamily properties as a hedge against inflation, with demand for housing staying strong across markets like the U.S.
4. Interest Rates and Fixed Income
The global interest rate environment is the number one concern for family offices in 2024. With 52% of respondents citing interest rate uncertainty as their primary worry, we’ve seen a marked increase in allocations to fixed income. These higher yields, especially in regions like Europe and Latin America, have attracted family offices seeking safer, interest-bearing investments. As a result, fixed income now accounts for 18% of portfolios, up from 16% last year.
5. Technology and AI Investment
Family offices are finally stepping up their tech game. Half of all family offices now have exposure to artificial intelligence (AI), particularly through private equity and public markets. While only 10% have implemented AI into their internal operations, many are exploring how to leverage AI for tasks like wealth reporting, forecasting, and even risk management. AI is no longer just a future consideration—it’s becoming a key component of investment strategies that target long-term growth.
6. Sustainability and Impact Investing
Sustainability is now a core part of family office strategy. Many are integrating impact investing into their portfolios, focusing on opportunities that align financial returns with positive social and environmental impact. Real estate, again, plays a pivotal role here, particularly in sustainable development and energy-efficient multifamily projects. Family offices increasingly see impact investing not just as a way to align with family values but as a smart financial decision for long-term wealth preservation and growth.
7. Cybersecurity: A Growing Concern
With growing digital operations comes greater vulnerability. Over 40% of family offices have experienced a cyberattack in the past two years, prompting a surge in investment in cybersecurity measures. As family offices continue to adopt new technologies, safeguarding sensitive financial and personal data has become an essential part of their risk management strategies.
Family offices in 2024 are navigating complex global challenges while continuing to expand their wealth. Whether through multifamily real estate investments, private equity, or cutting-edge technology, they are proving their ability to adapt and thrive. The future looks bright, and as long as these offices remain focused on long-term, resilient strategies, they’ll continue to build and protect wealth for generations to come.
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About Ellie Perlman
At Blue Lake Capital, Ellie and her team work exclusively with family offices and accredited investors, offering carefully curated investment opportunities that emphasize long-term wealth creation, stability, and risk-adjusted returns. A defining aspect of Blue Lake’s investment strategy is its integration of advanced AI-driven analytics and data science into the entire lifecycle of acquisitions and asset management. By leveraging cutting-edge technology, the firm executes data-driven forecasting on market trends, asset performance, and tenant behavior, ensuring strategic decision-making and optimized returns.
In addition to leading Blue Lake Capital, Ellie is the original founder and host of "REady2Scale - Real Estate Investing" podcast, which provides insights into multifamily real estate, alternative investments, and finance.
Ellie began her career as a commercial real estate attorney, structuring and negotiating complex transactions for one of Israel’s leading development firms. She later transitioned into property management, overseeing over $100M in assets for Israel’s largest energy company.
Ellie holds a Master’s in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can learn more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.
