Family offices are in risk management mode and focusing on increased diversification amid widespread concerns about the ongoing geopolitical uncertainty, BlackRock has stated.

Its 2025 Global Family Office survey found that 84 per cent of family offices saw the geopolitical turmoil as an important issue and a critical factor in their capital allocation decisions.

Concerns around trade disruptions and the increasing fragmentation in geopolitics have turned overall sentiment to negative for the first time since the study began in 2020.

In light of these factors, 68 per cent of family offices were focused on increasing diversification, and 47 per cent were increasing their use of a range of return sources, including illiquid alternatives, ex-US equities, liquid alternatives, and cash.

“Family offices, globally, entered 2025 with caution - a stance expected to continue through 2026 - as geopolitical tensions, policy shifts, and market fragmentation weigh on sentiment,” said BlackRock head of the Americas institutional business, Armando Senra.

“With 60 per cent of family offices pessimistic about the global outlook, confidence has been further shaken by new U.S. tariffs. Family offices are now prioritising diversification, liquidity, and structural reassessment of risk as they build resilience in their investment portfolios.”

Alternatives

Alternative assets were found to be becoming more popular among family offices, making up 42 per cent of their portfolios compared to 39 per cent in BlackRock’s 2022/23 survey.

Private credit and infrastructure were the most-favoured alternative assets, with 32 per cent of family offices planning to increase private credit allocations and 30 per cent to increase infrastructure allocations in 2025/26.

Respondents had a “clear preference” for special situations/opportunistic and direct lending when choosing a particular strategy within private credit, and planned both opportunistic (54 per cent) and value-add strategies (51 per cent) when increasing infrastructure allocations.

Three quarters (75 per cent) of family offices felt positive about the prospects for infrastructure investments due to its ability to generate stable cash flows, its role as a portfolio diversifier, and its perceived resilience.

“The sustained demand and interest in private credit and infrastructure from family offices is a testament to the illiquidity premia and differentiated return opportunity in the current investment landscape,” commented BlackRock head of family office, healthcare, endowment, and foundations in the US, Lili Forouraghi.

“Access to opportunities and the right strategies continue to rise in importance as these asset classes evolve from niche strategies to the cornerstone of client portfolios.”

Collaboration and technology

BlackRock found that many family offices were seeking to collaborate with external partners to complement their in-house talent, especially on private markets.

More than half cited gaps in their internal expertise around reporting (57 per cent), deal-sourcing (63 per cent), and private market analytics (75 per cent).

Nearly a quarter (22 per cent) of family offices have used an outsourced chief investment officer or would consider doing so, while many were looking to third-party partners for expertise in both investments and technology.

“As family offices navigate increasing complexity across investment strategies, risk management and private markets, they are turning to select partners who can deliver more than just products,” said BlackRock head of family offices, endowments, and foundations in EMEA, Mireille Abujawdeh.

“They need tailored solutions, data driven insights, deal sourcing and due diligence support, particularly in private markets where over half of respondents recognise gaps in internal expertise."

The report noted that while a ‘strong majority’ of family offices said they would consider using artificial intelligence (AI) for a variety of tasks, there were technical and organisational barriers to greater adoption.

It found that family offices were more likely to invest in tech firms building AI solutions (45 per cent), or in investment opportunities that they believed would benefit from the growth in AI (51 per cent), than they were to deploy AI tech internally to improve the investing process (33 per cent).

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