Artificial intelligence has moved quickly from a niche idea to a core investment theme for family offices, with almost two-thirds now saying it is a priority. Yet J.P. Morgan’s latest Global Family Office Report shows a clear gap between what families say they want to invest in and where their money is actually going.
Interest in AI is high, but real exposure remains limited. More than half of family offices have no allocation to growth equity or venture capital, the areas where many early AI businesses sit. Even more notable is the lack of investment in infrastructure. Almost 80 per cent of respondents report no exposure at all, despite the fact that data centres, power supply and logistics are essential to making AI work at scale. Many portfolios stop short of the funding that supports technological change.
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This caution goes beyond AI. Family offices continue to focus on familiar assets, with public equities and private investments taking up most portfolios. Assets often used as protection in uncertain times remain out of favour. Nearly three-quarters of family offices hold no gold, while close to 90 per cent avoid cryptocurrencies altogether. Against a backdrop of geopolitical tension, trade disruption and ongoing inflation risk, these gaps are notable.
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Inflation, in particular, is shaping behaviour. Family offices that see inflation as their main risk allocate almost 60 per cent of their capital to alternative assets, well above the global average. Hedge funds and real estate are popular choices, as families look for stability rather than rapid growth. Even so, infrastructure remains largely ignored, suggesting concerns around complexity, illiquidity or internal expertise.
Succession receives less attention. The report shows that most family offices are not prepared for leadership change. More than 80 per cent do not have a clear succession plan for key decision makers. This statistic is striking, with billionaire families estimated to pass $5.9 trillion to their children over the next 15 years, in what has been dubbed ‘the great wealth transfer’.
Running a family office is also becoming more expensive. For offices overseeing more than $1 billion, average annual costs now exceed $6 million. Competition for skilled staff, growing complexity and heavier regulation are pushing costs higher. Many family offices now operate like small institutions, even when decision making remains closely held.
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Governance sits at the centre of these pressures. As families grow and businesses pass between generations, internal conflict becomes a real risk. More than 40 per cent of business-owning families identify conflict as a top concern. Those families are more likely to put formal governance in place, recognising that clear rules and shared direction matter as much as investment performance.
Overall, the data points to a period of change. Family offices are becoming more professional and more ambitious. Yet there is still a wide gap between where money is invested today and where future value is likely to come from. Closing that gap will take more than enthusiasm for new technology. It will require sharp investment decisions and and stronger governance.
