It seems that the world of Family Office investment is undergoing a transformation. Traditionally, Family Offices tend to take a more conservative approach to investment to minimise risk while seeking sustainable returns. In recent years, however, Family Offices have started to explore riskier assets.
According to research by financial services provider Ocorian in November 2024, more than four out of five say their investment risk appetite will increase in 2025.
Regulatory Improvements and Their Impact
The research states that around 62% of surveyed Family Offices attribute this increase in risk appetite to stronger regulations surrounding riskier assets. Enhanced transparency and stricter compliance requirements have bolstered investor confidence, creating a more stable and predictable environment. These improvements mitigate some of the inherent risks associated with less traditional investments, empowering Family Office to explore higher-risk, higher-reward opportunities.
Shift to Alternative Assets
More than ever, Family Offices are diversifying their portfolios across a broad spectrum of alternative asset classes. This includes more allocations to private equity and venture capital, seeking high-growth potential in emerging companies. According to the Ocorian, infrastructure and private debt are expected to see the highest increases in allocations over the next two years. Even hedge funds, despite their volatility, are attracting attention as Family Offices seek to capitalise on emerging trends.
This is echoed in our previous Forbes article about the 2025 trends, where we found that there is a strong preference towards private equity in the upcoming year, with the Citi Private Bank report found that 47% of Family Offices expressed the most bullishness concerning direct private equity, while 41% were optimistic about private equity via funds.
Balancing Risk and Returns
While the allure of higher returns is undeniable, Family Offices are acutely aware of the associated risks. Every Family Office should have effective risk management in place. This involves a multi-faceted approach, including attracting and retaining skilled investment professionals with expertise in alternative assets, establishing robust governance structures, and conducting thorough due diligence on potential investments. A well-defined investment strategy, tailored to the family’s specific risk tolerance and long-term goals, is essential.
Managing risk and investments is not without its challenges. Family Offices must navigate the ever-evolving regulatory landscape and manage the volatility of high-risk markets effectively. However, these challenges also present significant opportunities. Innovation and diversification are key to success. Family Offices that can adapt to changing market dynamics, embrace new technologies, and identify promising investment opportunities will be well-positioned for future growth.
How We Can Help
When venturing into "riskier" asset classes, the people element becomes important. To successfully navigate the volatile market and manage risks, it is crucial to have the right team of people in-house. This means prioritising the recruitment of seasoned professionals with proven track records in the specific asset class that the family is interested in. On top of that, we recommend constructing an Investment Committee comprised of asset class-specific experts to provide a multifaceted approach to risk assessment and opportunity identification. It introduces a system of checks and balances into the Family Office, allowing the family to make more informed investment decisions. You can read our article about the Investment Committee on Forbes.
No matter what approach you take in your investments, Agreus is here to lend expertise. Our deep understanding of Family Office dynamics, culture, and specific job requirements ensures we find the perfect match for each position you need to fill. By leveraging our expansive network and esteemed reputation, we are able to attract candidates who are the right fit for various roles, from personal assistants and legal professionals to financial advisors and senior executives.
We offer more than standard recruitment services; we provide custom recruitment solutions specially crafted to meet the unique needs of each Family Office. Our strategic hiring process is designed to facilitate a smooth hiring experience, ensuring that the needs of Family Offices are seamlessly met.
For a more tailored conversation about hiring for your Family Office, please do not hesitate to get in touch.