According to the UBS Global Family Office Report, family offices are planning the most substantial changes to their portfolios in years, with a notable shift away from U.S. investments. The report indicates that 60% of family offices intend to adjust their investment allocations over the next year, a figure that is double the average over the past five years.
Many are reducing their U.S. holdings while increasing investments in emerging markets, particularly in Latin America and Africa. John Mathews, UBS head of private wealth management for the Americas, noted that concerns have shifted from trade tariffs to broader geopolitical tensions, global debt, and interest rates.
This trend reflects a growing unease with the concentrated U.S. stock market and fears surrounding an AI bubble, volatile economic policies, and rising debt levels. Advisors emphasize that this is not a complete withdrawal from the U.S. but rather a strategic move towards geographical diversification to mitigate risks associated with global crises.
The concept of 'jurisdictional diversification' is gaining traction, with two-thirds of family offices now holding assets in at least three different jurisdictions. Additionally, over a quarter plan to decrease their exposure to U.S. dollar-denominated assets, with many expressing concerns about the dollar's future as a reserve currency.
The survey highlights geopolitical uncertainty as the primary risk for family offices, followed by global trade wars and other economic threats.
While U.S. family offices have increased their domestic asset allocation, non-U.S. family offices are increasingly bringing investments back to their home regions or diversifying into other markets, indicating a significant divergence in investment strategies between U.S. and international family offices