While some institutional investors sit on the sidelines, family offices plan to significantly grow their allocations to alternative investments this year, according to a report by KKR.
Family offices are investing to grow wealth with future generations in mind — 93 percent said this was a focus for their portfolios, according to a KKR survey of more than 75 family office CIOs who each oversee an average of $3 billion in assets. They have enough capital and patience to dedicate big chunks of their wealth to illiquid investments such as private equity and venture capital and those allocations are getting even bigger this year.
In 2024, KKR’s network of family offices expect 52 percent of their portfolios to be invested in alts, up from 42 percent in 2022. The expansion is coming at the expense of all or most other asset classes. The CIOs said allocations to cash are shrinking from 11 to 9 percent, equities are declining from 32 to 29 percent, and allocations to credit are dropping from 15 to 10 percent.
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