How do the world’s wealthiest families invest, and what can we learn from them?

The 2025 UBS Global Family Office Report offers some fascinating insights into how the world’s wealthiest families think about risk, time and opportunity.

UBS captured the views of 317 family office clients.

The average net worth of participating families was US$2.7 billion, with their family office teams managing US$1.1 billion each.

Attitudes to risk, governance practices, running costs, staffing and succession planning are all covered.

However, it’s where they put their money that interests me most.

At a very high level, the average asset allocation (which is the mixture of different asset classes, like shares and bonds) isn’t too dissimilar from that of a managed fund (in the growth category) or an individual investor with a comparable risk profile.

There are some key differences though, with the most obvious being the 33 per cent allocation wealthy family offices have to alternative assets.

There’s no official definition of what this category includes, but it’s generally thought to be anything outside of the traditional investment classes – shares, bonds (otherwise known as fixed income) and cash.

Real estate is often included in alternatives (it represents 11 per cent of family office portfolios), but I’m going to focus on the other components as many New Zealanders already have a real estate exposure.

The rest of the alternative assets bucket includes private equity, private debt, hedge funds, art and antiques, gold, commodities and infrastructure.

Private equity represents the lion’s share of this, at almost two thirds of the alternative assets and 21 per cent of the total asset allocation.

Private equity means holdings in unlisted businesses, as opposed to listed equities anyone can buy on the sharemarket.

This offers the potential for higher returns, as well as a much wider range of investment opportunities.

Fees are higher for these types of investments, while complexity and a much larger minimum investment need to be considered too.

Private equity can also be very illiquid, meaning you can’t sell your holding quickly or easily if you need to.

None of these are likely to bother the typical family office, and an extended investment horizon is usually a feature of their approach.

A key advantage the uber-rich have is the ability to take a much longer-term view.

They think and invest in a truly intergenerational manner, which means their approach is probably closer to that of the NZ Super Fund than an individual investor.

The other 12 per cent is spread across the remaining alternatives, with private debt and hedge funds the biggest at four per cent apiece.

This 33 per cent allocation to alternative assets comes at the expense of listed equities, which average a 30 per cent weighting.

Add these together and you’re close to the 70 per cent weighting that the average growth fund has to equities.

Beyond that, the family offices have 19 per cent in traditional fixed income or bonds and 6 per cent in cash, close to our managed fund averages of 13 and 9 per cent (according to sorted.org.nz).

The big difference is the hefty weighting to alternatives, which is dominated by private equity but also includes the likes of gold, infrastructure and private credit.

For those looking to take a leaf out of this book, these types of assets aren’t nearly as unattainable as they once were.

There are diversified alternative asset funds available across the local market, managed by global specialists and structured in a tax-efficient manner for New Zealand investors.

While few of us have billions to invest, we can still learn from those who do – especially when it comes to thinking long-term and looking beyond traditional markets.

Market Insights enewsletter

Keep up to date with our fortnightly Market Insights enewsletter. Our research team provide timely and regular commentary and analysis on market developments, understanding investment jargon, and the impact of current events.

Subscribe Now