According to a new report by Ocorian, a specialized provider of services for high-net-worth individuals, family offices, financial institutions, asset managers, and corporations, the risk appetite of family offices is set to increase in the coming year, with improved regulation of riskier assets being the primary driver.
The study found that 82% of family office professionals, including those working in multi-family offices, believe their organizations’ investment appetite will grow, with one in eight (12%) expecting a significant increase. Among those anticipating heightened risk appetite, 62% point to the increase in regulation of riskier assets as the main reason, while 55% believe inflation has peaked or will do so soon, fostering greater risk tolerance. Additionally, 47% cite increased transparency around riskier assets as a key factor, and 44% see markets as poised for recovery.
Another conclusion of the study—which included 300 family office professionals collectively responsible for around $155 billion in assets under management—is that 99% of respondents agree that the transition toward investment in alternative assets among family offices is a long-term trend. Notably, 51% believe the Middle East is the jurisdiction likely to experience an increase in exposure to alternative assets, compared to 40% who selected the European Union and 38% who chose the United Kingdom. Another noteworthy finding is that 68% believe family offices are more likely to use funds as their preferred structure, compared to 66% who selected GPLP structures and 44% who opted for SPVs.
The survey estimates that alternative asset classes such as infrastructure and private debt will see the largest allocation increases in the next two years. About 26% of respondents predict that allocations to infrastructure will rise by 50% or more, while 23% expect the same level of increase in allocations to private debt.
The recent strong performance of alternative asset classes is seen as the main draw for family offices, surpassing the diversification benefits and greater transparency these asset classes offer. Their ability to provide income, the greater variety in the sector, and their qualities as inflation hedges also make them attractive.
“The risk appetite of family offices is increasing rapidly after many years of being highly focused on cash and taking a very cautious approach to investment. The long-term trend of family offices increasing their exposure to alternative asset classes is undoubtedly a factor in the growing risk appetite. It is clear that improvements in the regulation of riskier assets are being well-received by family offices. It remains essential that advisors and service providers deeply understand the unique risk appetite and governance needs of each family, ensuring transparency and trust in every decision,” said Annerien Hurter, Global Head of Private Clients at Ocorian.
Meanwhile, Mark Spiers, Partner at Bovill Newgate, added: “Regulation is playing an increasingly critical role in shaping family offices’ investment strategies. The findings presented in the Ocorian survey highlight how improvements in the regulatory landscape, particularly around riskier assets, are enabling family offices to explore new opportunities while ensuring robust governance frameworks. It is encouraging to see family offices feeling more comfortable with increased risk, especially in alternative asset classes like private debt and infrastructure, by recognizing the potential benefits of diversification and greater transparency. As regulatory oversight continues to evolve, it is essential that family offices work closely with their advisors to navigate this complex environment and ensure that all investment decisions align with both their long-term objectives and regulatory obligations.”
