In a white paper developed with Barton Consulting, IQ-EQ examines how family office investment strategies are evolving, bringing greater demands for specialist expertise, technology and governance.
Preserving family wealth, supporting its growth and preparing its transfer to future generations remain central to the family office model. These long-standing objectives are now supported by increasingly sophisticated investment strategies. In its white paper, Family offices and the rise of alternatives — Evolving investment strategies for a new era, IQ-EQ explores the role of alternative assets in portfolios and the implications for how family offices operate.
The paper estimates that there are approximately 10,585 single-family offices worldwide, each serving one family, and 5,675 multi-family offices, serving several. Beyond the sector’s expansion, it highlights the diversity of investment approaches, shaped by each family’s financial objectives, risk appetite and legacy priorities.
Asset allocation shaped by family priorities
Private equity, venture capital, real estate and hedge funds feature prominently in the strategies examined, alongside equities and fixed income. The paper nevertheless highlights differences between family office models.
Single-family offices can build highly tailored portfolios, sometimes concentrating on particular assets or sectors according to the family’s convictions. This flexibility may involve greater risk-taking, particularly in venture capital or direct investments.
Multi-family offices generally take a more diversified approach, reflecting the different circumstances and expectations of the families they serve. Pooling resources can also provide access to sophisticated strategies and strengthen their ability to negotiate investment terms.
Direct investment and co-investment: two preferred routes
How family offices access investments is another central theme. Direct investment allows them to acquire stakes in companies or other assets without investing through a fund. It can offer greater control and involvement in strategic decisions, while carrying illiquidity and concentration risks.
Co-investment, undertaken alongside other investors, allows family offices to share the financial commitment and draw on complementary expertise. According to the figures presented in the paper, this approach is preferred by 55% of single-family offices and 65% of multi-family offices.
Larger single-family offices, with more than $1 billion in assets, nevertheless show a stronger preference for direct investment, supported by their resources and in-house capabilities.
Diversification brings new demands for expertise
The white paper identifies several areas of interest, including artificial intelligence, fintech, cybersecurity and healthcare. Real estate remains a core asset class, while responsible investing and renewable energy are also broadening investment strategies.
Appetite for digital assets is more mixed. Some families include them within a diversified portfolio, while others remain cautious about volatility and regulatory uncertainty.
This growing complexity increases the need for due diligence, investment monitoring and risk management. IQ-EQ highlights the importance of tailored reporting tools, cybersecurity measures and operational services capable of supporting international portfolios.
Family governance is another key consideration. Defining responsibilities, establishing decision-making processes and anticipating disagreements can help families manage increasingly complex investments while preparing the next generation to take part in wealth management.
For further insights into the trends shaping family office investment strategies, explore IQ-EQ’s full white paper here 👇
