Study Reveals Optimism Among Family Offices Despite Economic Worries
A recent study conducted by Citi Private Bank indicates that, in spite of concerns over trade wars and potential recession, investment firms catering to the ultra-wealthy remain positive about their financial prospects.
Among 346 family offices surveyed, nearly half—45%—anticipate returns between 5% and 10% for the full year of 2025. Additionally, about one-third, or 38%, expect returns exceeding 10%. Only a small fraction, 4%, foresee flat or negative outcomes.
This optimism is reflected in their investment strategies, with 70% reporting direct investments in private companies over the past year. Interestingly, 40% of these investors indicated they were increasing their focus on direct transactions, rather than scaling back. The respondents hailed from 45 different countries and had an average net worth of approximately $2.1 billion.
Hanne Hoffman, who manages the family office practices at Citi, noted that many family offices are leaning into riskier assets, driven by bullish views on long-term trends, especially the rise of artificial intelligence and the coinciding need for energy and infrastructure. “It’s a stock picker market,” he stated, emphasizing that specific themes are central to their approaches, many of which are more suited to the private market.
Despite the bright outlook, there has been a slight reduction in overall direct transaction activity, which dropped from 77% to 70% among family offices. Particularly in North America, which makes up 40% of the responses, this figure fell from 86% to 77%.
Moreover, interest in early-stage fundraising appears to be waning. Family offices are showing a stable preference for growth-stage investments, likely due to a diminished perception of risk. The decline in early-stage funding was quite notable in North America, with a 17% drop in Series A or B round participation and an 11% decrease in seed funding.
Hofmann suggested that changes in the foundational structures of these offices might account for less reported direct investment activity. He observed a trend towards more selective investing—targeting companies with a narrower focus that can secure larger funding rounds.
According to Hoffman, family offices are engaging in opportunistic investments as institutional players, such as universities and pension funds, increasingly resort to selling illiquid assets due to slower exits. Approximately three-quarters of those surveyed reported owning controlling interests in operating companies.
“When other entities need to divest illiquid assets, family offices are often in a position to step in and buy,” he explained. The consistent cash flows from their operating companies enable them to reinvest into private equity effectively.
Overall interest in second-round funding declined by 2%, with this primarily attributed to reduced activity from Asia-Pacific offices. On a brighter note, profit margins for North American family offices increased from 19% to 29%, while Latin American offices reported a slight increase in interest.
About 8% of family offices consider gaining ownership of companies as a priority, and another 14% are contemplating it. “That seems reasonable,” Hofmann remarked, adding that family offices genuinely believe that owning businesses and identifying the right themes is a sustainable strategy for long-term value creation.
