Family offices are in risk management mode and focusing on increased diversification amid widespread concerns about the ongoing geopolitical uncertainty, BlackRock has stated.

Its 2025 Global Family Office survey found that 84% of family offices saw the geopolitical turmoil as an important issue and a critical factor in their capital allocation decisions.

Concerns around trade disruptions and the increasing fragmentation in geopolitics have turned overall sentiment to negative for the first time since the study began in 2020.

In light of these factors, 68% of family offices were focused on increasing diversification, and 47% were increasing their use of a range of return sources, including illiquid alternatives, ex-US equities, liquid alternatives, and cash.

“Family offices, globally, entered 2025 with caution - a stance expected to continue through 2026 - as geopolitical tensions, policy shifts, and market fragmentation weigh on sentiment,” said BlackRock head of the Americas institutional business, Armando Senra.

“With 60% of family offices pessimistic about the global outlook, confidence has been further shaken by new US tariffs. Family offices are now prioritising diversification, liquidity, and structural reassessment of risk as they build resilience in their investment portfolios.”

Alternative assets were found to be becoming more popular among family offices, making up 42% of their portfolios compared to 39% in BlackRock’s 2022/23 survey.

Private credit and infrastructure were the most-favoured alternative assets, with 32% of family offices planning to increase private credit allocations and 30% to increase infrastructure allocations in 2025/26.

Respondents had a “clear preference” for special situations/opportunistic and direct lending when choosing a particular strategy within private credit, and planned both opportunistic (54%) and value-add strategies (51%) when increasing infrastructure allocations.

Three quarters (75%) of family offices felt positive about the prospects for infrastructure investments due to its ability to generate stable cash flows, its role as a portfolio diversifier, and its perceived resilience.

“The sustained demand and interest in private credit and infrastructure from family offices is a testament to the illiquidity premia and differentiated return opportunity in the current investment landscape,” commented BlackRock head of family office, healthcare, endowment, and foundations in the US, Lili Forouraghi.

“Access to opportunities and the right strategies continue to rise in importance as these asset classes evolve from niche strategies to the cornerstone of client portfolios.”

---