Family Offices Shift 60% of Portfolios to Alternative Assets

Ultra-high-net-worth investors and family offices are aggressively increasing allocations to alternative investments, including hedge funds, private equity, and infrastructure. BNY Wealth reports that alternative investments now comprise 60% of single-family office portfolios, surpassing traditional assets for the first time.

This shift is driven by a need for income streams independent of equity market direction and a surge in demand for data centers and energy networks to support artificial intelligence. In the Asia-Pacific region, JPMorgan Asset Management reported a 40% increase in private wealth alternative assets over the last 12 months.

While investors continue to increase allocations to public equities, they are using new capital to fund alternatives rather than rotating away from traditional markets. Financial experts warn that these assets introduce specific risks, such as capital lock-ups and valuations that may not reflect real-time market deterioration.