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Family offices now have more of their money invested in private markets than the public stock market — even as the market rallies — according to a new survey.

A survey of North American family offices conducted by Campden Wealth and RBC found that family offices had 29.2% of their investments in private markets, which include private equity, venture capital and private debt, compared to 28.5% in publicly traded stocks.

It marks the first time in the survey that family offices had more invested in private markets than public stock. Their stock allocation has come down from 31% the year before, while their private investments increased from 27%. The remaining assets were invested in cash, bonds, alternatives, hedge funds, commodities, real estate and other investments.

“Family offices have maintained a consistent pattern of augmenting their allocations to private markets,” according to the study.

And they plan to concentrate even more heavily on private markets in the coming months, according to the survey, which found 41% of family offices plan to boost their allocations to private equity funds, and a third plan to put more money into direct private equity deals.

Only 23% planned to add to their developed-market public stocks, while 15% plan to trim their stock holdings, according to the survey.

The results underscore a sweeping shift in the investment practices of family offices, the private investing arms of families with assets typically of $100 million or more, even despite a recent rally in stocks. The S&P 500 is up 19% so far this year.

Over the past decade, and especially after the pandemic, family offices have rushed into private equity and so-called direct deals, where they buy stakes in private companies on their own. Family offices say private markets offer better returns over the long term without the volatility of stocks.

Many family office founders, typically entrepreneurs who made their fortunes starting and selling private companies, also like to leverage their experience by finding companies in their area of expertise and providing advice along with capital.

It’s unclear whether the bet will continue to pay off. Private equity funds are struggling with tight financing and expensive loans, along with a lack of exits given the drought of IPOs.

Meantime, as investors expect interest rate cuts in 2024, stocks may continue to rally.

When asked which asset class will give them the best returns in the coming years, family offices ranked “private equity and venture capital” first, followed by public equities.

“Despite the cautious approach adopted by family offices in response to the (2022) retreat of financial markets, their perspectives on the sources of the best long-term returns remain steadfast,” the report said. “Private equity and venture capital continue to head the list.”

Along with private markets, family offices are also showing increasing interest in alternative assets, including real estate and commodities. When asked about their investment priorities for the coming year, the number one choice was to “invest in alternative asset classes.”

Still, family offices remain cautious about the year ahead. Nearly 60% cited “recession risk” as the largest financial risk, followed by China tensions and “excessive Fed tightening.”

Their bond holdings, currently representing 8% of investments from the group, could expand further, with a third planning to add to their bond positions.

Family offices also have a large amount of cash waiting for the right opportunity. They hold 9% of their assets in cash, nearly double the levels in 2021.

“They have a lot of cash on the sidelines,” said Angie O’Leary, head of wealth planning for RBC Wealth Management, U.S. “They can deploy that cash on things like real estate or an acquisition or investing in private markets. They’re not in a hurry, they’re just looking for that great opportunity.”

The survey spanned 330 single-family offices and private multi-family offices around the world, with 144 in North America. The family offices surveyed had an average of $1.3 billion in total wealth, including private businesses.

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