Coming out of an era of low interest rates and ample liquidity, many of the world’s richest families have made — or are in the planning stages of — major shifts in asset allocations, as seen in the latest UBS Global Family Office Report 2023. The survey covers 230 family offices, each handling investments for a single wealthy family. These families possess a combined net worth of almost $500 billion, translating to an average of $2.2 billion per family.

Family offices’ allocation to alternative investments is changing, with a significant drop in direct private equity exposure from 24 percent to 14 percent, while allocation to hedge funds has risen from 4 percent to 7 percent, according to UBS. The trend toward active rather than passive investment management holds true globally. Alternatives represent 45 percent of total portfolio investments, and approximately one-third of family offices plan to increase their exposure to real estate when capital becomes more available and valuations are lower.