Family offices turn to private markets, allocations up 500% since 2016

The Rise of Private Assets Among Family Offices

The world’s wealthy individuals have been getting richer, and their investment firms have been adapting to this trend by shifting their focus towards private assets, such as direct lending and data centers. This shift is reflected in the significant increase in the number of family offices allocating their wealth to private markets. According to data from Preqin, a leading alternative investment data platform owned by BlackRock, the number of family offices with allocations to private markets has surged by 524% since 2016, rising from 651 to 4,067.

This growth is not limited to family offices alone, as wealth management firms and endowments and foundations have also increased their allocations to private markets. However, the rate of growth among family offices surpasses that of these other groups, with wealth management firms seeing a 410% increase and endowments and foundations seeing an 81% increase. The growth in private market allocations among family offices has been particularly marked in recent years, with a nearly 21% increase in 2023, a 26% increase in 2024, and an 8% increase in the first half of 2025.

Driving Factors Behind the Growth

So, what is driving this growth in private market allocations among family offices? According to Armando Senra, who leads BlackRock’s institutional business in the Americas, family office activity reflects a broader interest in private credit and infrastructure from investors. A BlackRock survey conducted in the spring of 2025 found that nearly a third of single-family offices planned to invest more in private credit and infrastructure from 2025 through 2026. This is likely due to the attractive returns offered by these assets, as well as their potential for long-term growth.

Jonathan Flack, the leader of PwC’s U.S. and global family office practice, attributes much of this activity to the fact that family offices have far more wealth to manage. By Deloitte’s estimate, family offices managed a combined $3.1 trillion in 2024, up 63% from 2019. With this increased wealth, family offices have less need for quick cash and can afford to make illiquid private investments. As a result, private markets have become increasingly appealing to family offices, which are known to invest for decades or even generations.

A Shift Towards Selectivity

However, family offices have become increasingly selective about private offerings. A May survey by UBS found that family offices planned to increase their private debt holdings but trim their private equity bets in favor of developed market equities in 2025. For U.S. family offices, the expected drawdown was especially steep. Despite this, when asked about their five-year plans, more family offices intended to increase rather than decrease their allocations to private equity and other private assets. This suggests that while family offices may be becoming more cautious in their investments, they still see value in private markets and are committed to investing in them for the long term.

Overall, the growth in private market allocations among family offices reflects a broader trend towards increased investment in alternative assets. As the wealthy continue to accumulate wealth, it is likely that we will see even more investment in private markets, driven by the attractive returns and long-term growth potential offered by these assets. Whether this trend will continue in the future remains to be seen, but one thing is certain: family offices will play a major role in shaping the investment landscape in the years to come.