How Wealthy Families Are Investing Now

When the world’s wealthiest families alter their course, markets take notice. Over the last year, their portfolios have tilted toward private equity and leaned into crypto, while luxury assets like art, watches and even sports-related investments have gained traction as potential diversifiers.

Although public equity continues to play a key role in family office portfolios, its position is diminishing relative to private equity.

Our latest survey of ultra-high-net-worth families, with assets ranging from $250 million and up, illustrates how this shift is playing out. The “big 3” — private equity (28%), public equity (15%) and real estate (13%) — command over half (56%) of their reported allocations. Each asset class serves a distinct purpose: private equity for growth, public equity for liquidity and diversification, and real estate for stability and income. 

The Big Three: Private Equity, Public Equity and Real Estate  

Private equity stands at the forefront, solidifying its position as the cornerstone of family office portfolios. Comprising funds, direct investments, and venture capital, these assets make up 28% of total allocations. Among family office decision-makers managing over $1 billion, plans to increase private equity investments jumped 69% in the past year. Wealthy families see private equity as a way to secure higher returns and benefit from the ‘illiquidity premium,’ while gaining access to opportunities beyond public markets—especially as more companies choose to go private and remain private for longer periods. This structural shift means that much of today’s innovation is happening within privately held businesses, and investors can only unlock these opportunities—and the resulting returns—through private markets.

By contrast, public equity investments no longer dominate allocations. They now occupy a 15% share of family office portfolios on average, a 28% decline from a year ago. Despite the decline, the second largest allocation of wealthy families continues to provide the potential for growth, a source of diversification and a valuable counterweight to private asset illiquidity.

Real estate, at 13%, remains a steady contributor. It offers reliable cash flow and serves as a natural hedge in periods of elevated inflation, helping families to distribute higher risk strategies elsewhere in the portfolio. 

Expanding into Crypto, Direct Deals and Luxury

What fills in the rest of the picture is telling. Real assets, including commodities, metals and natural resources, saw allocations jump 50% over the past year as inflation hedges regained prominence. And digital assets, once a niche investment play, are increasingly mainstream. Of the family offices we surveyed, 74% say they are already invested or actively considering crypto, a 21% jump from a year ago. Those with no exposure or interest has fallen sharply, down 37% from a year ago.      

Motivations are varied. Regulatory clarity, especially bitcoin ETF approvals in the U.S., has lowered barriers. Interest from younger successors is also a key factor. As a result, 44% of family office professionals now see crypto as a genuine investment opportunity, not just a speculative asset.

Control is another theme driving allocations, with 46% of family offices revealing they expect to make six or more direct investments in the next year. A direct investment takes place when an investor negotiates directly with a private company over the provision of debt or equity, rather than providing financing through a third-party fund. Family office decision-makers cite transparency, influence and better alignment with family values as reasons to bypass traditional funds for direct investments.

Co-investing alongside general partners is also on the rise. This approach enables family offices to work with and invest directly alongside a lead sponsor who can help the family by sourcing direct investment opportunities, providing due diligence support on deals and structuring transactions. In general, co-investments are seen as attractive because they offer increased transparency and historically lower fees. However, staffing is a significant challenge for direct investing programs, particularly among U.S. family offices, where 44% say it’s a key challenge, up 83% from a year ago.  

Beyond the usual suspects, one-third of investors report holding luxury assets like art, watches and even sports franchises. Once seen as indulgences, they are being re-evaluated as diversifiers and inflation hedges, particularly as opportunities in media rights and sports ownership expand. 

AI, Tax Efficiency and What Comes Next

Technology underpins much of the evolution we’re seeing in the portfolios of wealthy families. AI is both a top conviction theme, with 83% stating they see it as one of the strongest opportunities over the next five years, and a key investment tool. More than half of family offices (52%) say they’re using AI to help them make investment decisions. Technology platforms more broadly are also climbing the agenda, with 16% naming them as a top priority.

Tax-managed investing is rising as well. A clear majority of U.S. family offices (63%) now integrate tax-managed equity into their overall investment approach, up 31% year over year. These strategies allow families to earn index-like returns while proactively minimizing taxes through tax-loss harvesting. Of the decision-makers we surveyed, 74% consider tax efficiency as “extremely or very relevant” this year.

For family offices, this emphasis on tax efficiency underscores a broader truth. In a world of shifting allocations, every basis point counts.

To take a deeper dive into how the world’s wealthiest families are investing, download the full BNY Wealth study: Investment Insights for Single Family Offices.