UBS also reported that family offices are targeting long-term growth sectors such as healthcare, electrification, and artificial intelligence.
Global trade wars pose the biggest risk to investments in 2025, according to the UBS Global Family Office Report 2025. The survey, conducted in the first quarter of 2025, found that 70 per cent of family offices identified trade conflicts as the greatest threat to their financial goals over the next 12 months. The survey was completed before the Trump administration’s announcement of new US tariffs, indicating pre-existing concerns over escalating global trade tensions. Family offices ranked trade wars above major geopolitical conflict and inflation, placing these issues at the forefront of their investment strategy concerns.
Geopolitical Conflict And Recession Also Raise Concern
Looking further ahead, family offices remain wary of the long-term risks associated with serious trade disputes. According to the UBS report, 61 per cent of respondents expressed concern about major geopolitical conflict over the next five years. Additionally, 53 per cent feared a global recession stemming from current economic and political instability. Ongoing global tensions, such as the Russia-Ukraine war and the Israel-Palestine conflict, continue to add uncertainty to trade and investment planning. As a result, family offices are closely monitoring global developments and re-evaluating asset allocations to better protect portfolios.
Shift In Portfolio Strategy: Equities Up, Cash Down
In response to these mounting risks, family offices have started to shift their portfolio strategies. UBS revealed that allocations to developed market equities rose from 24 per cent in 2023 to 26 per cent in 2024, with a planned increase to 29 per cent in 2025. Investments in private debt also doubled from 2 per cent in 2023 to 4 per cent in 2024, and may rise to 5 per cent in 2025. Meanwhile, cash allocations dropped from 10 per cent in 2023 to 8 per cent in 2024, and are expected to fall further to 6 per cent in 2025, indicating a move toward more active investments.
Growing Interest In AI, Healthcare, And Electrification
UBS also reported that family offices are targeting long-term growth sectors such as healthcare, electrification, and artificial intelligence. In addition to diversifying through manager selection and hedge funds, many are turning to precious metals to hedge against inflation and volatility. With global trade facing disruption from US tariffs and continued geopolitical instability, these family offices appear committed to adapting quickly. The survey shows that strategic diversification remains key as they prepare for uncertain economic conditions in both the short and long term.
(With Inputs From ANI)
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