From CNBC:

A new study shows that family offices are increasing their investments in alternative assets like hedge funds and private equity. KKR’s survey of 75 chief investment officers found that family offices had 52% of their portfolios in alternative investments in 2023, up from 42% in 2022. This growth comes at the expense of cash and publicly traded stocks.

Family offices, the private investment vehicles for wealthy families, are shifting away from public markets towards alternatives like real estate and private equity. This move is driven by the longer-term investment horizon of family offices, allowing them to take advantage of illiquidity premiums in private and alternative assets.

Family offices are also taking advantage of the current market environment, where traditional lenders are pulling back on loans to companies. This situation allows family offices to play offense and invest in sectors where they have experience, which others may be shying away from.

The survey also revealed that family offices plan to continue moving their capital from cash and stocks into alternatives in the coming year. Their favorite alternative investments include private credit, infrastructure, private equity, and commodities. Many are also looking to invest in specific sectors of real estate, such as data centers, logistics, and warehouses, as well as oil and gas, which are experiencing opportunities due to forced selling by other investors.



Read more: Family offices shift out of cash and into alternatives