Family offices — once viewed as passive stewards of generational wealth — have evolved into some of the most sophisticated allocators in global markets. Goldman Sachs’ Adapting to the Terrain (2024) report reveals how these investors are repositioning amid a new market regime defined by higher rates, inflation persistence, and geopolitical complexity. The result is a more active, diversified, and strategically opportunistic approach to preserving and compounding wealth across generations.

Why It Matters

The shift from easy money to a more volatile macro landscape is forcing even the most patient capital to adapt. Family offices are increasing allocations to private markets, real assets, and thematic opportunities like AI, energy transition, and health innovation — all while rebalancing traditional equity and bond exposure. The report highlights a fundamental mindset change: wealth preservation now requires operational agility and alternative sources of return.

Investor Implications

• Private Markets Lead: Nearly 80% of surveyed family offices plan to maintain or expand private-equity allocations, with a tilt toward direct deals and co-investments.
• Diversification Beyond 60/40: Traditional portfolios are giving way to multi-asset structures that blend real estate, infrastructure, and credit to hedge macro risk.
• Thematic Investing: Growing conviction in technology-driven and sustainability-linked opportunities is reshaping portfolio construction.

Risk Assessment

• Liquidity Trade-offs: Heavy private-market exposure raises liquidity and valuation risks, especially during cyclical downturns.
• Generational Governance: Succession planning and governance structures are increasingly critical to ensure continuity amid more complex portfolios.
• Macro Sensitivity: A less synchronized global economy makes timing and regional allocation far more consequential than during the low-rate era.

Portfolio Positioning

1. Balance Offense and Defense – Blend opportunistic private equity and credit with liquid diversifiers such as treasuries or gold.
2. Focus on Real Assets – Infrastructure, energy, and real estate remain key inflation hedges with durable yield.
3. Institutional Discipline – Adopt formalized investment processes and risk controls typical of endowments and pensions, while retaining family-office flexibility.

The Bigger Picture

The world that built the modern family office — low rates, globalization, and monetary accommodation — has ended. What’s emerging is an environment that rewards strategic patience, information advantage, and the ability to deploy capital across both public and private markets without being constrained by benchmarks. Family offices, by adapting to this terrain, are effectively becoming the new “smart money” — flexible, focused, and forward-positioned for a multipolar world.

Sources

• Goldman Sachs, Family Office Investment Insights Report: Adapting to the Terrain (2024)
• UBS Global Family Office Report (2024)
• Campden Wealth, Global Family Office Benchmarking Study (2023)
• BlackRock Alternatives, Private Market Outlook 2024
• Preqin, Global Private Capital Report 2024

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