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A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Despite trade war turmoil and recession fears, investment firms of the ultra-wealthy are optimistic about their returns, according to a new survey by Citi Private Bank.
In a poll of 346 family offices, nearly half (45%) of respondents said they anticipated returns of 5% to 10% for the full-year 2025, and more than a third (38%) expected returns to exceed 10%. Only 4% anticipated flat performance or negative returns.
Accordingly, many family offices are making bullish bets, with seven out of 10 saying they had made direct investments in private companies over the past 12 months through mid-July. Of those firms, twice as many (40%) reported increasing or significantly increasing their exposure to direct deals than decreasing it. The respondents hailed from 45 countries and averaged $2.1 billion in net worth.
Hannes Hofmann, who leads Citi’s family office practice, told Inside Wealth that family offices are upping their exposure to risk assets as they are bullish about specific long-term trends — such as the artificial intelligence boom and the related demand for energy and new infrastructure — rather than individual asset classes.
“It’s a stock picker’s market,” he said. “It’s not being long or short sectors or asset classes. It’s having exposure to specific themes, and many of these themes are only implementable in the private market.”
That said, while the vast majority of family offices that make direct deals are either upping their exposure or maintaining it, optimism has dimmed from last year’s survey. A net 15% of respondents were bullish on direct private-equity investments, down from 36% in 2024.
Overall, the percentage of family offices reporting direct deals in the past 12 months fell from 77% to 70%. For North American family offices, which made up 40% of respondents, this share dropped from 86% to 77%.
Family offices also indicated less interest in early stage fundraises and startup or seed funding. Their preference for growth-stage investments held steady, which may be due to less perceived risk, according to the report. The decline was especially sharp for North American family offices, which reported drops of 17% and 11% in Series A or B and seed funding, respectively.
Hofmann said respondent base changes might account for the decline in family offices reporting direct investment activity. He said he has also observed that they’re being more selective, narrowing their sector focus and targeting companies that can draw larger rounds.
Hofmann added that family offices are making opportunistic plays as institutional investors like university endowments and pension funds turn to secondary sales during the exit slowdown. It helps that three-quarters of respondents reported owning controlling stakes in operating businesses.
“When other players have to sell their illiquid assets, family offices can come in and buy them,” he said. “With family offices, you’ve got a group of investors who get a reliable cash flow every year from operating businesses so they can afford to put more money into private equity.”
While interest in secondaries dipped by 2% overall, this was largely driven by a drop in activity by Asia Pacific family offices. North American family offices’ interest in secondaries increased from 19% to 29%, while firms in Latin America reported their interest edged up by a few percentage points.
Eight percent of family offices reported that acquiring a controlling stake in a company was a priority and another 14% said they were considering it.
“I think that’s a significant amount,” he said. “Family offices really believe that owning companies, getting exposure to themes and selecting the right companies are the long-term road to generating additional value.”
