What role does private equity play in family office portfolios?

According to the 11th AFFO-EY Barometer published in 2025, private equity accounts for 34% of the average asset allocation of French family offices, ahead of publicly traded stocks (23%) and real estate (16%). This figure illustrates a fundamental trend: large family fortunes are placing increasing emphasis on private markets in their long-term wealth management strategies.

Why such an allocation? How do family offices build their portfolios? Do they invest directly in companies, or do they favor specialized funds? And above all, what lessons can a high-net-worth investor learn from these practices?

In this article, we analyze the reasons why family offices invest in private equity as a key component of their asset allocation, drawing on key industry studies, including those byAFFO,UBS, Campden Wealth, and Bain & Company.

Why Family Offices Favor Private Equity

The prominence of private equity in family office portfolios is not merely a passing trend. It reflects a wealth management strategy— —that aligns with their objectives, investment horizon, and entrepreneurial culture.

An investment horizon compatible with private markets

Unlike many individual investors, family offices generally take a long-term view spanning several decades or even generations.

Their priority is to preserve and grow their family's wealth over the long term rather than to seek constant liquidity.

Private equity fits naturally into this framework. Private equity funds typically invest over a time horizon of eight to twelve years, giving companies time to implement their growth strategies, improve their operational performance, and create value.

This timeframe is perfectly consistent with the investment objectives of a Family Office.

An entrepreneurial culture closely aligned with the companies we support

Many family offices have their origins in the sale of a family business.

Their founders understand the challenges that business leaders face: international expansion, external growth, recruiting executive teams, and business succession.

Investing in private equity thus allows them to continue supporting the real economy while remaining closely connected to a sector they understand well.

This proximity also explains why some family offices are interested in co-investments or direct investments as a complement to specialized funds.

A Quest for Diversification

Today, public markets account for only a portion of the value created by companies.

Many high-growth companies remain private for longer than they used to. According to Bain & Company, the number of private equity-backed companies has risen sharply over the past two decades, expanding investment opportunities outside the stock markets.

For family offices, incorporating private equity therefore allows them to diversify the sources of value creation within their portfolios.

A rigorous selection of the best fund managers

The most sophisticated family offices generally do not seek exposure to the entire private equity market.

They prioritize a rigorous selection process for experienced managers who are capable of supporting companies over the long term and implementing value-creation strategies that set them apart.

This approach is similar to that of large institutional investors, who place particular emphasis on the quality of management teams, their track record, and their ability to navigate various economic cycles.

The role of private equity in family office portfolios is therefore not solely driven by the pursuit of returns. It reflects an investment philosophy based on patience, diversification, and the selection of managers capable of supporting companies over the long term.

What percentage of their budget do they allocate to private markets?

Private equity now plays a central role in the investment strategies of many family offices.

‍Thisallocation varies from country to country, but all major studies in the sector point to the same conclusion: family investors are gradually increasing their exposure to private assets.

According to the 11th AFFO-EY Barometer (2025), private equity now accounts for 34% of the average asset allocation of French family offices. It is their top asset class, ahead of publicly traded stocks (23%), real estate (16%), bonds (12%), and cash (8%).

On an international scale, UBS’s “Global Family Office Report 2025” confirms this trend. Private markets—which include private equity, private debt, infrastructure, and unlisted real estate—are a strategic component of the portfolios of high-net-worth families.

‍This exhibition reflects a desire to tap into sources of value creation that are less closely tied to traditional financial markets.

An allocation strategy focused on the long term

The composition of an Family Office 's portfolio differs significantly from that of a retail investor.

The goal is not merely to seek short-term returns, but to preserve and grow wealth over several decades. This approach naturally leads to reducing the weight of the most liquid assets in favor of investments capable of supporting companies’ growth over the long term.

The table below shows the average allocation observed among French family offices.

*Source: 11th AFFO-EY Barometer, 2025.

This breakdown highlights a major shift: for many family offices, private equity is no longer a marginal diversification asset class. It is now a strategic pillar of asset allocation.

An exhibition that varies depending on the size and maturity of the Family Office

Not all family offices have the same asset allocation.

The largest firms often havededicated investment teams capable of directly analyzing market opportunities, selecting specialized fund managers, or participating in co-investments.

Conversely, smaller family offices generally prefer a fund of funds, which allows them to gain access to a diversified portfolio of companies while benefiting fromthe expertise of experienced management teams.

However, this difference in implementation does not call into question the main finding: private equity plays a significant role in family wealth, regardless of the size of the family.

A trend that is here to stay

Family offices' interest in private equity has been steadily growing for more than a decade.

Several factors account for this trend:

• the number ofcompanies that remain privately held for a longer period before a potential initial public offering;
• the professionalization of private markets and the expansion of the range of specialized funds;
• the search for new sources of diversification amid volatility in the public markets;
• the development of private debt, infrastructure, and secondary market strategies, which now complement traditional private equity funds.

Studies published by UBS, Campden Wealth, and Bain & Company show that this trend is evident in Europe, North America, and Asia.

‍Investment approaches vary by region, but the conviction remains the same: private markets now play a fundamental role in the portfolios of the most sophisticated high-net-worth investors.

An allocation that is, above all, strategic

The emphasis placed on private equity does not mean that family offices are neglecting other asset classes.

Listed stocks continue to provide liquidity and exposure to major international companies.

Bonds help stabilize portfolios, while real estate continues to play an important role in asset diversification.

Private equity complements this balance by providing access to privately held companies and value-creation strategies that are not available on public markets.

This complementarity explains why family offices generally think in terms of overall asset allocation rather than in terms of a dichotomy between public and private markets.

How do family offices structure their private equity allocations?

Investing in private equity is not simply a matter of selecting a fund. Family offices generally take a structured approach, similar to that of large institutional investors. Their goal is to build a portfolio capable of supporting value creation in companies while managing the risks associated with an illiquid asset class.

This approach is based on several complementary principles.

Diversifying Investment Strategies

Private equity encompasses strategies with different risk profiles and value creation approaches. Family offices rarely seek to focus on a single market segment.

Their asset allocation typically combines several approaches in order to diversify performance drivers and investment cycles.

This diversification helps ensure that a single strategy does not determine the portfolio’s overall performance.

Selecting the Best Fund Managers

Studies published by Bain & Company, Cambridge Associates, and McKinsey highlight that performance disparities among private equity funds remain significantly greater than in public markets.

In other words, the choice of web Fund manager s plays a crucial role.

Family offices therefore devote a significant portion of their resources toanalyzing management teams. In particular, they evaluate:

• the partners' experience;
• team stability;
• sectoral specialization;
• the ability to create operational value;
• the history of previous funds.

This rigorous selection process is one of the cornerstones of their investment strategy.

Diversify the vintages

Family offices rarely invest their entire allocation in a single year.

They spread their investments across several vintages in order to reduce the impact of economic cycles.

This approach has several advantages:

• invest in different market environments;
• smooth out capital calls;
• spread out the distributions over time;
• to limit the risk associated with a specific investment period.

Diversifying across vintages is now considered a best practice by most institutional investors.

Combining Multiple Access Methods

Family offices generally do not limit their exposure solely to private equity funds.

Depending on their size, internal resources, and level of expertise, they may combine several investment strategies.

• Primary funds, which provide access to a diversified portfolio of companies selected by a specialized in Fund manager .
• Co-investments, which offer the opportunity to invest directly alongside a fund in certain transactions.
• Secondary investments, which involve acquiring existing interests in funds or portfolios.
• Direct investments, which are most often reserved for family offices with teams dedicated to analyzing and monitoring companies.

This combination makes it possibleto tailor the portfolio to wealth management goals while diversifying the sources of value creation.

Building a Progressive Allocation

Finally, family offices generally prefer to gradually increase their exposure to private equity.

This approach makes it possibleto adjust investments over time, monitor the initial returns on investments, and ensure alignment with the portfolio’s liquidity needs.

It also promotes greater diversification across fund managers, industry sectors, geographic regions, and investment time horizons.

Rather than seeking one-time exposure, family offices thus build portfolios capable of providing long-term support to companies throughout economic cycles.

What can a private investor learn from the approach taken by family offices?

Family offices generally have financial resources, specialized teams, and access to private markets that differ from those of an individual investor. Their strategy therefore cannot be replicated exactly.

On the other hand, the principles that guide their allocation offer useful insights for anyone looking to build wealth over the long term.

Think first in terms of allocation

One of the key characteristics of family offices is that they determine their asset allocation before selecting their investments.

They begin by determining their financial goals, investment horizon, liquidity needs, and risk tolerance.

Only then do they select the asset classes capable of meeting those objectives.

This approach makes it possible to build a well-rounded portfolio, rather than simply accumulating investments without a clear overall strategy.

Diversify sources of value creation

Family offices generally do not seek to draw a distinction between public and private markets.

They view these two worlds as complementary.

• Listed stocks provide liquidity and exposure to major international companies.
• Private equity provides access to privately held companies, often before they reach full maturity.
• Real estate, bonds, or private debt serve other wealth management objectives.

This diversification of value-creation drivers is one of the cornerstones of their management.

Place particular emphasis on the selection of fund managers

In private markets, not all funds have the same characteristics.

The performance gaps observed between the top-performing and bottom-performing funds have historically been wider than in many listed asset classes, underscoring the importance of selecting the right management teams.

Family offices therefore devote a significant portion of their investment process to analyzing fund managers: the teams' experience, sector specialization, investment discipline, ability to support companies, and the track record of previous funds.

This requirement serves as a reminder that in private equity, the quality of access is often just as important as the asset class itself.

Building Your Exhibition Step by Step

Family offices rarely increase their allocation all at once.

They generally invest gradually in order to spread out their investment periods, space out capital calls, and adjust their portfolio as their net worth changes.

This approach also helps limit the risk of investing all available funds in a single market.

Incorporating Illiquidity into a Comprehensive Analysis

Private equity involves a long-term investment horizon and offers less liquidity than public markets.

Family offices accept this aspect because it is part of an overall wealth management strategy. They ensure they maintain sufficient liquid assets to meet their day-to-day needs while allocating a portion of their wealth to long-term investments.

This balanced management of liquidity is a key principle of their allocation.

An inspiring approach, though not necessarily a model to be replicated

The goal is not to replicate a " Family Office" portfolio.

Every investment portfolio has its own specific constraints, whether in terms of income level, liquidity needs, family goals, or the ability to tolerate risks associated with private markets.

On the other hand, their approach highlights several universal principles: defining a coherent asset allocation strategy, investing with a long-term perspective, diversifying sources of value creation, and rigorously selecting investment management partners.

These principles largely explain why family offices now place a high priority on private equity in their wealth management strategies.

Conclusion

The growth of private equity within family office portfolios reflects a profound shift in wealth management. Long considered an asset class reserved for institutional investors, private equity has become a cornerstone of the investment strategies of many large family fortunes, thanks to its ability to support the growth of privately held companies and diversify sources of value creation.

The most recent data from AFFO, UBS, and Campden Wealth show that this trend is here to stay. Family offices are not merely seeking exposure to private markets; they are building diversified portfolios, rigorously selecting their managers, and investing with a time horizon spanning several years—or even several generations.

While this strategy cannot be replicated exactly, it highlights several lessons that apply to any approach to wealth management: defining an asset allocation tailored to one’s objectives, prioritizing a long-term perspective, diversifying the drivers of value creation, and paying particular attention to the quality of the management teams.

As private markets continue to develop, these principles are expected to remain central to the strategies of the most sophisticated institutional investors.

FAQ

What percentage of their portfolios do family offices invest in private equity?

According to the 11th AFFO-EY 2025 Barometer, private equity accounts for an average of 34% of French family offices’ asset allocations. Internationally, studies by UBS and Campden Wealth also show that private markets play a central role in the wealth management strategies of high-net-worth individuals.

Why Do Family Offices Invest So Much in Private Equity?

Family offices seek investments that align with their long-term time horizon. Private equity allows them to gain exposure to unlisted companies, diversify their sources of value creation, and support the growth of the real economy, all while adhering to an intergenerational wealth management approach.

Do family offices invest exclusively through funds?

No. Private equity funds are often the primary point of access, but some family offices also make co-investments, direct investments, secondary market transactions, or private debt investments, depending on their size and resources.

Why is the selection of fund managers essential in private equity?

Performance differences among funds have historically been more pronounced than in many listed asset classes. Family offices therefore pay particular attention to the experience of the management teams, their areas of expertise, and their ability to create long-term value.

Can Individual Investors Take Cues from Family Offices?

Yes, without trying to replicate their portfolio. Their approach emphasizes several universal principles: defining an asset allocation tailored to one’s goals, investing gradually, diversifying sources of value creation, and rigorously selecting the managers to whom one entrusts one’s capital.

What is the difference between a venture capital ( Family Office ) fund and a private equity fund?

A family office ( Family Office ) is an organization responsible for managing the wealth of one or more high-net-worth families. A private equity fund is an investment vehicle that raises capital to invest in privately held companies. Family offices may invest in these funds, but they may also use other asset classes to build their asset allocation.

Is private equity reserved for family offices?

No. Historically reserved for institutional investors and high-net-worth individuals, private equity has become more accessible thanks to changes in regulations and the development of new investment vehicles. However, eligibility requirements, minimum investment amounts, and fund characteristics vary depending on the strategies and management firms.