For its fifth edition of the Global Family Office Survey Insights report, Citi Private Bank asked its global network of family-office clients 50 wide-ranging questions to gauge their sentiments and activities, as well as the trends and issues at the top of their agenda. Here are some important takeaways from the Global Family Office 2024 Survey Insights.

From cash to risk assets

Cash holdings fell in 2024 as family offices put their liquid resources to work in the markets. Some 43 per cent of respondents increased their exposure to public and private equity, with the strongest shift into public equity recorded in Asia. Fewer family offices raised their weighting to cash—31 per cent compared to 47 per cent in 2023—while 37 per cent of respondents cut cash holdings in 2024. Allocations to real estate saw little overall movement, as in 2023. Meanwhile, half of those surveyed upped their allocation to fixed income.

Bullish expectations

Almost all respondents (97 per cent) had a positive outlook for portfolio returns over a 12-month horizon, a two-percentage point increase from 2023. Their optimism last year indeed gave way to upside, with over three quarters of respondents registering gains.

Future path of interest rates

The evolution of interest rates was a worry this year with some 52 per cent cited high and rising interest rates as a concern, overtaking inflation in the list of priorities. US-China relations and market overvaluation were also top of mind, mentioned by 45 per cent of respondents.

Sophisticated investment approaches

More and more family offices, around 60 per cent, are embracing sophisticated, disciplined processes, such as building in-house teams led by CIOs, creating investment committees, and introducing investment policy statements. Alternative investments are also receiving greater weight in portfolios.

Increasing leverage

Family offices are making strides in adopting institutional techniques. These include exploring active strategies to manage the risks of concentrated positions, such as derivative solutions. While nearly half of respondents were not leveraging their portfolio at all, two thirds were exploring their financing needs.

Gradual adoption of AI

While portfolio exposure to artificial intelligence (AI) has increased and it is likely a driver of the strong portfolio returns that many family offices saw over the past year, the adoption of generative AI within their operations is lagging, with just one in 10 family offices saying they were doing so. This is broadly similar to the situation across the business world.

Coping mechanisms

While 86 per cent of family office respondents identified at least eight areas of risk, most felt that they were handling them well. Cybersecurity, geopolitics, and family dynamics remained top concerns. Against this backdrop, many respondents mentioned risk management as a key responsibility of family office heads, second only to investment management.

Adopting formal governance

While two thirds of families relied on a governance system within investments, governance remains a work-in-progress across the broader family enterprise, such as other financial, business, philanthropic, and family activities. Almost half of survey respondents said they did not have a formal investment policy statement. The philanthropic decision-making process appears to be largely informal.

Balancing finance and family

Addressing wealth management and family matters remained top priorities for family offices and the families they serve. Family matters embrace the likes of fostering family unity and continuity, such as preparing the next generation for their future responsibilities as stewards of wealth. However, many family offices often find it a struggle to fulfil both mandates. Over half of them said that meeting family expectations were now an ever-greater priority than adapting to shifting market conditions.

External collaboration

Serving families effectively increasingly requires collaboration with external parties. Family offices reported more collaboration with such partners, as they further professionalised their operations and investment functions. Investment management and reporting services are most commonly performed in-house, while other tasks are carried out externally or in collaboration with external providers.

Read the full Citi Private Bank Global Family Office 2024 Survey Insights here.