A recently published report by Swiss bank UBS indicates that the US dollar's depreciation last year prompted many family offices to review their investment portfolios.
Specifically, almost half concluded they held too many USD-linked assets, and 65% believe confidence in the dollar's role as a reserve currency will weaken, prompting a reassessment of their dollar-denominated asset holdings.
This trend is helping the euro and Swiss franc emerge as preferred alternatives. "Many family offices are considering reducing their exposure to the USD or planning regional diversification," said Benjamin Cavalli, head of strategic clients for UBS's global wealth management division.
 |
Euro and USD banknotes. *Photo: Reuters* |
The survey, conducted in Q1, included 307 family offices across over 30 markets, with an average net worth of 2,7 billion USD per entity. The results show 60% plan to adjust their asset allocation in the next 12 months, the highest level UBS has ever recorded.
Developed markets remain mainstays in portfolios, but capital is gradually shifting towards emerging market equities and infrastructure, while real estate holdings are being reduced. "For the first time, we are seeing family offices looking to increase their presence in Asia-Pacific and to a certain extent in Western Europe," Benjamin Cavalli added.
According to him, this trend is primarily observed among non-US family offices, but small signs of a desire for de-dollarization are also emerging from family offices within the United States.
Artificial intelligence (AI) continues to attract interest, with 65% of family offices having invested across its entire value chain, including data center infrastructure, software platforms, and semiconductor manufacturers.
Despite concerns about valuations, they intend to maintain or increase their exposure to AI. "AI continues to be the defining investment theme of this decade," said Yves Alain Sommerhalder, head of global wealth management solutions at UBS.
According to UBS, geopolitical conflicts have emerged as the top concern, prompting family offices not only to reallocate their asset classes but also to structure their operations across multiple jurisdictions.
By Phien An (based on Reuters, UBS)
