Wealthy families are leaning harder into alternative assets as they navigate a world of sticky inflation and geopolitical uncertainty.
According to J.P. Morgan Private Bank, global family offices that see inflation as the primary risk have committed nearly 60% of their portfolios to alternatives—about 22 percentage points higher than the global average allocation across all those surveyed in the sector. Hedge funds and real estate are leading the charge, even as roughly 70% remain unexposed to infrastructure.
More than half of these investors, or 55%, are targeting annual returns between 7% and 10%—a goal the bank described as "high but achievable" based on its modeling. Real estate exposure stood out at 16.3%, more than double the global average of 7.4%, underscoring the continued appeal of tangible assets amid economic volatility.
The top five risks cited by U.S. family offices were rising interest rates (64%), inflation (61%), economic growth (61%), geopolitics (57%), and asset valuations (56%). Globally, however, the risk picture looked markedly different, with concerns centered on geopolitics (20%), liquidity (12%), trade policy and tariffs (12%), asset valuations (11%) and economic growth and portfolio concentration (each 10%).
On average, U.S. family offices held 34.3% of assets in private investments—spanning 10.3% in private equity, 1.3% in secondaries, 4.2% in growth equity and venture capital, 2.3% in private credit, 8.5% in real estate, 0.6% in infrastructure, transportation and other real assets, with the remainder going toward control-oriented private investments.
That compares with 25.6% among international offices, where allocations were 8.9% in private equity, 0.8% in secondaries, 2.1% in growth equity and venture capital, 2.5% in private credit, 5.9% in real estate, 0.9% in infrastructure and other real assets and 4.5% in control-oriented strategies.
Still, U.S. offices had only 10.7% of their portfolios in fixed income—roughly half the global average of 20.89%. J.P. Morgan attributed that gap to differences in regional taxation, risk appetite and liquidity preferences. About 35% of U.S. respondents also planned to increase real estate exposure over the next 12-to 18-month period, compared with 24% internationally.
"Alternatives are no longer a tactical complement, but a strategic pillar," said Kristin Kallergis Rowland, the bank's global head of alternative investments, in prepared remarks.
"Across private equity, private credit, real assets and hedge funds, we're deploying more capital than ever as families seek durable income streams, access to innovation and diversified sources of return."
Interestingly, 40% of global respondents reported no allocation to real estate at all. Meanwhile, U.S. private offices held 7.1% in cash, while globally cash was the single largest planned reduction—down 21%—as investors looked to redeploy excess liquidity into higher-yielding assets.
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