Fully 60% of family offices plan to make strategic changes to their investment allocation in the next year – about twice the level of the past five years, according to the UBS Global Family Office Report. Among those making changes, many are trimming their U.S. holdings and adding to emerging markets.
Globally, North America is the only region where family offices plan to reduce their allocation in the next 12 months. They plan to add in Latin America and Africa, they said.
“Last year, all of the family offices were super concerned about global trade tariffs tensions,” said John Mathews, UBS head of private wealth management for the Americas. “Today it’s really shifted to geopolitical tensions around the world, global debt, and now interest rates. And not just the short-term implications, but the longer-term implications of these as well.”
The pullback reflects a broader shift away from the U.S. by family offices, the private investment arms of the wealthiest families. America’s highly concentrated stock market and fears of an AI bubble, tariffs, a falling dollar, volatile economic policies and rising debt and bond yields have caused many family offices to dial back their U.S. exposure and spread more of their money around the world.
Advisors caution that it’s not a wholesale “sell America” trade. Rather, international family offices want to be more diversified geographically as global crises grow.
The wars in Ukraine and Iran, changing tariffs, immigration and debt battles have all made the world a more complicated investing landscape. With no real safe haven, the best strategy is to balance risks across the world.
A chief goal among family offices is to reduce their U.S. dollar exposure, or what some are calling “de-dollarization.” More than a quarter of family offices plan to lower their holdings of U.S. dollar-denominated assets, according to the UBS survey. Two thirds of family offices said they expect confidence in the U.S. dollar’s reserve role to fall, and nearly half said they are overexposed to the dollar.
The Swiss franc and the euro are the preferred currencies for diversification, according to the survey.
Family offices said the No. 1 risk in the next 12 months — as well as in the next five years — is geopolitical uncertainty, according to the survey. The second-ranked risk was a global trade war. Hyperinflation, cyberattacks and debt crises were also cited as high risks.
“These forces point to preparation not just for near term volatility, but for an extended period of elevated and interconnected risk,” according to the survey. “Family offices look to be focused on building resilience across a broader and more complex risk landscape, combining adjustments to their asset allocation with multishoring strategies.”
Family offices plan to add to their emerging market equities, as well as their infrastructure and gold investments, the survey found. They plan to reduce their cash slightly as well as their real estate holdings.
There is a large and growing divergence between family offices in the U.S. and those overseas, however. U.S. family offices are happy to stay concentrated at home, reporting that they increased their share of assets in the U.S. over the past year, from 86% to 88% on average.
North America also accounts for the bulk of global family investments, with 53% of all global family assets.
Yet non-U.S. family offices are bringing more money back to their home countries or to other non-U.S. markets. Chinese family offices now have half their assets invested in Western Europe, for instance. Western European family offices have 41% of their assets in their home region, according to the survey.
The U.S. family offices have actually kind of doubled down,” Mathews said. “But all the other family offices around the world are now diversifying out of the dollar-denominated securities, out of the U.S. a little bit.”
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