Family offices brace for higher inflation with real estate and alternative investments

Group 1: Investment Strategies - Many family offices are shifting towards real estate and alternative investments, particularly private equity and hedge funds, to protect their portfolios against inflation [1][3] - U.S. family offices reported holding 40% of their investments in public equities, while 34% are in private investments, including private equity, venture capital, private credit, and real estate [5] Group 2: Concerns and Risks - A significant number of family offices are concerned about inflation and geopolitical risks, with 64% citing interest rates and 61% citing inflation as major risks to their portfolios [2] - Nearly three-quarters (72%) of family offices surveyed reported having no exposure to gold, indicating a reluctance to invest in gold despite its recent price surge [6][7] Group 3: Focus on Technology - Artificial intelligence (AI) is a prominent investment theme for family offices, with 65% including AI in their portfolios or prioritizing it for future investments [4] - There is a strong belief among family offices that AI should be a central part of their investment strategy, although there are concerns about concentration risk [6] Group 4: Cash Management - Family offices are maintaining large amounts of cash and cash equivalents, with some holding cash to prepare for potential downturns and to capitalize on opportunistic investments if asset prices decline [8] - Concerns about inflation are leading some family offices to prefer holding cash, as higher rates could result from inflationary pressures [9]