The Richest Families Ride Out Market Ups and Downs. They Can Afford To.

(Dreamstime)

For the richest families in the world, consistency is key.

Sticking to a diversified portfolio that includes generous allocations to public and private stocks throughout market cycles is a strategy wealthy families follow to ensure they sustain wealth over generations, says Sara Naison-Tarajano, global head of Goldman Sachs Private Wealth Management Capital Markets.

“There is something to be learned about having discipline with your asset allocation,” says Naison-Tarajano, who is also global head of two other units—Goldman Sachs Apex, which brings investment opportunities to family offices, and Goldman Sachs Partner Family Office.

Goldman has surveyed some of the largest family offices around the world biennially since 2021. For its 2025 report released Wednesday, “Adapting to the Terrain. Family Office Insights,” Goldman captured the views of “key decision makers” at 245 family offices from a survey conducted this spring. More than two-thirds of respondents have at least $1 billion in assets, and all represent offices with a professional investment staff.

As the report details, the world has changed in the two years since the last survey was conducted in 2023. “There have been meaningful changes in leadership and policy across jurisdictions, and markets and businesses have had to adjust to a different climate for international relations and trade,” according to the report.

Still, a long-term approach to building wealth drives families to remain invested and to continually look for more opportunities. Families surveyed have 12% of their assets in cash and cash equivalents, but 34% plan to reduce their cash holdings and many plan to invest in “risk assets” in the next 12 months, the report said.

Families surveyed have taken advantage of rising stock markets, particularly in the U.S., by boosting their allocations to public equities to 31% this year, on average, up from 28% in 2023.

Their allocation to private equity fell to 21% from 26%. Naison-Tarajano doesn’t read much into that decline. “Remember, we’re coming off two 25% years in the S&P,” and a lot of the increase in public equities could be market appreciation, she says. Also, in response to questions, families didn’t indicate “anything that would lead us to believe [they were] moving away from private equity,” Naison-Tarajano says.

Many large families are headed by entrepreneurs who are comfortable investing in young companies, she says. They also don’t need immediate access to all their wealth, and can afford to lock away an investment for several years, as is typically the case with private equity.

The overall allocation families surveyed made to alternative investments—which also includes private credit, hedge funds, and real estate—only fell two percentage points to 42% in 2025 from two years earlier. Alternative investments tend to be less liquid, meaning investors are obligated to hold them for longer periods before realizing returns.

The slight decline in allocations to alternatives largely reflects caution from Asian investors, who have heightened concerns about geopolitical risks given international tensions surrounding China. On average, nearly 61% of family offices surveyed view geopolitical conflict as a top risk, but it was a top-three concern for 75% of those in Asia, the report said.

Asian family offices surveyed allocated only 36% of assets to alternatives, and kept 19% in cash, while families in the Americas—which represented 47% of survey respondents—allocated 46% of their portfolios to alternative investments, as did families based in the Europe, the Middle East, and Africa (EMEA), Naison-Tarajano said. Families in the Americas have 10% in cash while those in EMEA have 8%.

These differences extended to private equity. Families in the Americas allocated 25% to the sector, compared with a 22% allocation in EMEA and only 15% in APAC. The fact the U.S. has a large, well-established private-equity market is one reason for the difference, Naison-Tarajan says. Another is the U.S. tax regime, she says, which incentivizes investors to hold assets longer.

Also of note: A large percentage of U.S. family offices have at least $1 billion in assets—71%. “That means they can handle more of that illiquidity,” she says.

As for what sectors of the economy are attracting family office dollars, technology reins supreme. According to the survey, 58% expect to be overweight technology investments in the next 12 months—a figure 15 percentage points higher than two years ago, the report said.

Most family offices surveyed—86%—have “some form of investment in AI,” according to the report, noting 52% indicated they invested in AI through public stocks, and 38% said they had exposure to the sector through companies empowered by AI.

But Goldman expects the level of their investment is even higher, “given the role and impact of the technology in major public equity indices, many family offices are almost certainly even more exposed to AI, directly or indirectly, than reflected here.”

Cryptocurrency is attracting a more cautious reaction. Though interest is higher than a couple of years ago, only 33% of the offices surveyed have some exposure, the report said.

“They’re not thinking about it as a hedge either—it’s a very risk-on asset class if you look at its performance,” Naison-Tarajano says. But she notes the trend is interesting—in 2021, 16% of families had exposure to crypto; in 2023, 26% reported some exposure.

“They’re starting to dip their toe in more, but it isn’t a core part of any part of the asset allocation that I see,” she says.

Write to Abby Schultz at abby.schultz@barrons.com