Artificial intelligence is the most popular investment theme for family offices, according to a new report.
More than three-quarters (78 per cent) of family offices plan to invest in generative AI in the next two to three years, according to the UBS Global Family Office Report 2024.
[See also: Who will win and lose in the AI revolution?]
The percentage is even greater in the US – where the global AI revolution has been led by homegrown tech companies – with some 83 per cent of family offices reporting a likelihood to invest.
The Global Family Office Report surveyed 320 family offices representing families with an average net worth of $2.6 billion, and worth a combined $600 billion.
It found that overall family offices have increased appetite for active management, are concerned over the possibility of a major geopolitical conflict, and are paying greater attention to sustainability.
‘The 2024 report shows that family offices followed through on the plans for material shifts in strategic asset allocation foreseen in 2023’s report,’ note the report authors, George Athanasopoulos, head of global family and institutional wealth co-head global markets at UBS, and Benjamin Cavalli, head of global wealth management strategic clients.
Content from our partners
[See also: How should UHNWs protect against the risks of AI?]
‘In a move to rebalance portfolios, allocations to developed market fixed income rose by the largest amount seen in five years. Additionally, real estate allocations declined at a time when commercial real estate prices in some regions have corrected. However, family offices do not expect to implement such big changes this year.’
With US companies leading the generative AI revolution, average global asset allocation remains tilted towards North America, with half of family office portfolios invested in the region’s asset classes.
More than a quarter of asset allocations are in Western Europe (27 per cent) and 17 per cent in either Asia Pacific or greater China. However there will be a shift in power over the next five years, with more than a third of respondents seeking to increase their allocations in Asia-Pacific, alongside North America.
From a thematic perspective, AI comes out on top, although there are clear regional differences. Almost nine in 10 North Asian family offices plan to invest over the next two to three years, compared to just 68 per cent of Latin American respondents.
AI is followed by healthtech (70 per cent) and automation and robotics (67 per cent). As AI is more popular with American family offices so too is healthtech with Swiss outfits, with 76 per cent anticipating investing in this area in the near future (compared with 72 per cent in AI).
