Family Offices Eye Private Equity, Crypto in Push Beyond Stocks

Family offices, particularly those managing over $1 billion, are significantly shifting investment strategies, decreasing exposure to public equities while increasing allocations to private equity and exploring digital assets. The BNY Wealth report indicates that public equities now represent only 19% of investable assets, a 28% decrease from the previous year, with nearly 70% of these family offices planning to increase private equity fund allocations in 2025, a substantial rise from 2024.

Analysis

A significant strategic shift is underway among family offices, particularly those with over $1 billion in assets under management, as they recalibrate portfolios away from public equities towards private equity and digital assets, according to the 2025 Investment Insights report from BNY Wealth. Public equities now constitute approximately 19% of investable assets for these firms, marking a 28% decrease from the previous year. Concurrently, two-thirds of these large family offices plan to increase allocations to private equity funds in 2025, representing a nearly 70% surge in the proportion of firms boosting such investments compared to those with similar plans for 2024. This trend, coupled with growing interest in digital assets, suggests a proactive search for enhanced returns and diversification, signaling evolving investor sentiment and capital reallocation that could influence liquidity and valuations across public and private markets.

Key Decisions for Investors

• Consider re-evaluating strategic asset allocations, potentially reducing exposure to public equities while increasing allocations to private equity and exploring digital assets, mirroring the trend observed in sophisticated family offices.
• Analyze the underlying motivations for this reallocation by family offices—such as pursuit of higher alpha, diversification benefits, or concerns about public market valuations—to assess the strategic implications for their own investment mandates and risk profiles.
• Monitor capital flows and valuation trends in private markets and digital assets, as heightened demand from substantial investors may create both opportunities and challenges regarding deal sourcing, entry multiples, and liquidity.
• Fund managers specializing in private equity or digital assets should prepare for increased capital inflows, which could present fundraising opportunities but also intensify competition for quality investments and potentially exert upward pressure on valuations.