They are among the most powerful investors on the planet, controlling billions in capital, shaping markets from Silicon Valley to Singapore, and rarely speaking a word in public. But every two years, Goldman Sachs coaxes them into talking. The bank’s new 2025 Family Office Report offers an unusually candid glimpse into how these private dynasties see the world right now: wary of geopolitics, intrigued by artificial intelligence, and quietly preparing to deploy vast sums into everything from secondaries and private credit to longevity science and digital assets.
This year’s theme—Adapting to the Terrain—feels apt. Geopolitical tensions, protectionist trade policies, volatile inflation expectations, and the AI revolution form the backdrop. And yet, despite the noise, the message is clear: family offices remain resolutely risk-on.
“This is our third time doing the report,” explained Meena Lakdawala-Flynn, co-head of One Goldman Sachs and global head of private wealth management. “We started doing it in 2021… we ask some consistent questions so that we can see changes in, especially asset allocations over time.” She pointed out that “50% of the respondents’ family office was founded after 2010, which really speaks to the trend of increasing the number of family offices.”
These organizations aren’t just pools of capital. They’re structurally different from other investors. “They don’t have to respond to boards, to outside investors. They’re not as focused on the daily mark-to-market versus long-term generational capital,” said Lakdawala-Flynn. This long-term perspective gives them the ability to step in where others can’t—whether on boards, leading investments, or writing checks in dislocated markets.
And they have ambitious targets. The average family office in the survey is aiming for a 10% net annual return. “That is higher than sovereigns and pensions,” Lakdawala-Flynn noted, underscoring why their allocations look different from other long-duration investors.
Risks on the Radar
When asked to identify the most significant risks, 61% of respondents cited geopolitics—by far the largest margin. “That speaks to obviously how much is going on in the world: hot spots, Russia-Ukraine, the Middle East, and then U.S.–China growing tensions,” said Tony Pasquariello, global head of hedge fund coverage at Goldman. “I find geopolitics is a tricky variable for the market to weigh out, because who really knows anything? But clearly very much top of mind.”
What was striking is how these concerns differed by region. “Geopolitical [risk was] 75% in Asia versus 57% in the U.S. and 53% in India,” said Sarah Naison-Tarajano, global head of private wealth management capital markets. Inflation was seen as a greater concern in the U.S. (34%) than in Asia (25%), while alignment risk registered 13% in India compared with just 2% in the U.S. and Asia.
And yet, the allocations don’t look defensive. “Asset allocation hasn’t changed that much, despite a very different market from 2023,” said Naison-Tarajano. “These investors are overwhelmingly risk-on.”
Allocations in 2025
The average family office portfolio now stands at:
- 31% public equities (up from 28% in 2023)
- 42% alternatives (down slightly from 44%)
- 11% fixed income (up from 10%)
- 12% cash (unchanged)
Within alternatives:
- 21% private equity (down from 26% in 2023)
- 11% private real estate & infrastructure (up from 8%)
- 4% private credit (up from 3%)
- 6% hedge funds (flat)
The increase in public equities was the largest swing since the last survey. As Pasquariello put it: “Of all the asset blocks, the one that increased the most from ’25 versus ’23 was public equity. That went from 28% to 31%.” Some of that was active reallocation; some was simply the market “doing the work” after two years of 25% returns in the S&P 500.
Private Markets: Slowing, but Not Stopping
Private equity, the cornerstone of many family office portfolios, has seen allocations drift down to 21%. But intent remains strong. “Thirty-nine percent are looking to increase even off of these relatively high allocations,” said Naison-Tarajano. The reason is structural: companies are staying private longer. “It was 6.7 years before going public; today, that’s almost 11 years, and they’re going public at much higher valuations. There’s a lot of money to be made investing in private markets.”
Private credit, meanwhile, is steadily gaining share. “In the last report, the average allocation was 3%. It’s gone up to 4%,” said Pasquariello. “That’s a 33% increase off the base.” What’s driving it? Direct lending yields of 8–9%, attractive risk-reward higher up the capital stack, and a recognition that family offices had been underweight. “The illiquidity premium you get in private equity also exists in private credit,” he added.
Secondaries are another growth area. “Almost three-quarters are investing, up from 60% two years ago,” said Lakdawala-Flynn. Families see secondaries as a way to buy high-quality assets at discounts, mitigate the J-curve, and take advantage of institutions selling for liquidity reasons.
Technology, Healthcare, and AI
Innovation themes dominated forward-looking allocations. “You really see the AI theme coming out here,” said Lakdawala-Flynn. “Technology, materials, energy, and also the overweight of healthcare.”
Family offices are no longer just investors in AI; they’re users. Half are already applying AI tools internally for research, due diligence, and productivity gains. This makes them early adopters compared to most institutional investors.
Healthcare, meanwhile, is being reframed. “The industry is going from reactive to proactive,” Lakdawala-Flynn explained. Longevity, wellness, and proactive care offer both financial and philanthropic alignment. “It’s also a space where philanthropic capital and investment capital tend to overlap.”
Sports, Digital Assets, and Gold
Some of the most striking growth has come in non-traditional asset classes. “Sports is an area in 50% are interested, of which 25% are currently invested in and 25% are interested in the future,” said Lakdawala-Flynn. Long-term passion projects generate diverse revenue streams—such as media rights, real estate, and streaming platforms—and align with families’ permanent capital mindset.
Digital assets, once a novelty, are increasingly mainstream. “Sixteen percent were invested in 2021; we have 33% that are invested now,” she said. Regional differences are pronounced: 75% of Asia-based family offices are either invested in or interested, compared with 54% in the U.S. and 42% in India.
Bitcoin, in particular, has achieved legitimacy. “It has really achieved what I would argue is a store of value property within a broad portfolio mix,” said Pasquariello. Still, adoption remains below 50%.
Gold also plays a role, especially as a hedge. “Gold continually comes up as a theme,” said Lakdawala-Flynn. “It’s super easy to understand… why you would hold this if you were worried about geopolitical risk.” In some regions, clients insist on physical bars with serial numbers. In others, ETFs suffice.
Barbell Portfolios: Cash and Duration
Family offices continue to hold substantial cash—12% on average. That cash is increasingly seen as dry powder. “Net 18% decrease to cash,” said Lakdawala-Flynn, pointing to survey results showing families plan to redeploy into equities and private equity.
Fixed income has also shifted, with a notable increase in duration. “Two years ago, 20% were sub one year, now that’s 7%, and the majority are out past three years,” she noted. This reflects expectations for rate cuts and a focus on fiscal sustainability.
Generational Shifts
Perhaps the most understated yet powerful trend is the growing role of the next generation. “The involvement from the next gen continues to grow,” said Lakdawala-Flynn. They often start with a single-asset class mandate and then expand their responsibilities. Many now sit on boards or family governance structures.
“We are meeting so much more of the next gen than we did in 2018,” said Naison-Tarajano. As more fortunes have been created since 2010, heirs are reaching their late twenties and early thirties, stepping into active roles.
For all the risks cited—geopolitics, tariffs, political instability—the mood was hardly defensive. “If some of this noise settles down, there’s a real opportunity to deploy more into risk assets,” said Lakdawala-Flynn.
Pasquariello drew a sharp distinction between hedge funds that manage short-term risk and family offices that deploy structural capital. “The Warren Buffett axiom is, like, you add risk in a panic. That would have been the right judgment in April. And you saw some of that.”
Even gold’s rise is less about fear than balance. “It’s a pretty small slice of the pie,” Pasquariello acknowledged. “But it’s been a fantastic asset—it’s up over 30% this year.”
Looking Back, Looking Ahead
Compared with 2021 and 2023, the 2025 report shows remarkable consistency. Allocations to public equities have ticked back up, private equity has pulled back slightly but remains core, and private credit and secondaries are expanding. Thematic bets on AI, healthcare, and digital assets are stronger than ever. And the next generation is stepping forward.
As Pasquariello summed up: “The world always feels evolved to place… but point to point, I’d say [this has been] an average volatility environment. And when you have these flashes [of stress], I think this crowd has done a good job taking out the wish list and buying—putting some risk in the portfolio.”
For all their wealth and influence, family offices still prefer to operate out of sight — which is what makes this glimpse so revealing. Beneath the noise of geopolitics and market volatility, they’re charting a patient, long-term course, using their capital and independence to move where others hesitate. If Goldman Sachs’ 2025 report shows anything, it’s that the decisions made behind closed doors today will help shape the markets of tomorrow.
