How do the portfolios of family offices differ from the portfolios offered by DFMs in our database?

That is the question Asset Allocator will be answering today. 

The 2024 UBS Global Family Office report has landed and we’ve dived into the details surrounding the average portfolio makeup of society’s wealthiest individuals. 

Let’s take a look. 

Perhaps unsurprisingly, the share of private assets and alternatives are much, much higher than both MPS and multi-asset funds, given the unconstrained approach family offices can exercise in their holdings. 

The split between traditional and alternative assets is almost 60:40, which is pretty remarkable given our allocators tend to park just 15 per cent in alts. 

Family offices in Europe on average hold 22 per cent in private equity, an asset class which our DFMs are almost entirely unwilling to touch. 

Other significant weightings in their private holdings are real estate at 12 per cent, hedge funds at 4 per cent, and private debt at 3 per cent. 

Regarding real estate, however, this asset class experienced the largest year-on-year decline among such allocators, largely as a result of uncertainty over when valuations will bottom out, plus the rising appeal of more liquid yield-generating assets. 

And on the flipside, their equity/bond allocations are significantly lower – with just 28 per cent in equities and 16 per cent in fixed income, compared to our allocators 55:30 ratio between the two main asset classes.

However, the survey highlighted that the latter is in fact at its highest level in five years thanks to the belief in the ‘higher for longer’ narrative – for context, their previous fixed income total stood at a mere 12 per cent in 2022. 

And finally, in some good news for active managers out there, the report found that four in 10 family offices globally said that they are currently relying more on manager selection and active management to enhance portfolio diversification than the year before. 

This is particularly pertinent given Asset Allocator’s recent 100 Club release, which outlined some of the premier funds and asset managers plying their trade at the moment. You can read our round-up of the awards, here.