Family Offices Shift Toward Alternative Investments

New study shows family offices plan to increase private equity and venture capital holdings as leadership changes.

Updated on Oct. 20, 2026 in Financial Planning

Family Offices Shift Toward Alternative Investments

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Do you expect your own financial planning to change as the next generation takes control?

A Bank of America study reveals that U.S. family offices are prioritizing capital growth through increased alternative asset allocations. Many firms expect these investment shifts to accelerate as new leadership steps in over the next few years.

Why it matters

With 58% of offices citing capital growth as their primary goal, family offices are increasingly turning to strategic borrowing and non-traditional assets. These firms are also leveraging governance and education to ensure continuity during expected leadership transitions.

Illiquid holdings currently represent 45% of assets in the average family office. Private equity makes up 27% of total alternative investment allocations.

The players

Bank of America

This is a multinational investment bank and financial services holding company that produces regular research on wealth management trends.

Escalent

This is a human behavior and analytics advisory firm that conducts research and data collection for financial services institutions.

The details

Family offices are utilizing credit to finance direct investments and support operations, with 40% of firms now holding sports investments. As management changes occur, offices are increasingly utilizing external advisors to prepare the next generation for leadership roles.

Escalent surveyed 355 decision makers in January and February 2026.
Bank of America released the 2026 Family Office Study on October 20, 2026.
Offices plan to add private equity and venture capital over the next one to three years.
A fifth of offices expect their CEO to leave within three years.
42% of offices anticipate a leadership departure within five years.

Market Dynamics

This trend signals a departure from the historical reliance on liquid stocks and bonds by private investment vehicles. Firms are increasingly favoring long-term capital growth through illiquid assets rather than traditional market-traded portfolios.

Family offices are increasingly integrating strategic borrowing to fund purchases and support direct investment operations. Retail investors should note that this shift toward illiquid private equity may affect the availability of co-investment opportunities in private markets.

The takeaway

Family offices are heavily emphasizing governance and education to prepare for a significant wave of leadership changes in the coming years. Implementing new technology and professionalizing operations remains a critical focus as these firms transition to the next generation.