AI Tops Direct Investments as 89% of Family Offices Post Gains

Artificial intelligence has become the number one destination for family office direct investments, selected by 51% of participants in Citi Wealth's "2026 Global Family Office Report." The survey draws on responses from 351 family office executives across 41 countries, and it lands amid high interest rates, doubts about financial system stability and geopolitical risk.

The headline number is resilience. Nearly nine out of ten family offices — 89% — reported positive portfolio returns so far in 2026. Roughly 60% posted gains of up to 10%, while 13% exceeded 15%. Asia-Pacific led every region, with 26% of family offices there clearing the 15% mark.

Return targets skew toward sustainable growth rather than home runs. Some 41% of family offices target annual returns of 7% to 10%, 20% aim for 5% to 7%, and 18% seek 10% to 13%. In Asia-Pacific, 22% chase returns above 15% per year.

What changed in the risk picture?

Inflation has overtaken everything else as the dominant macro concern, cited by 63% of respondents — up sharply from 37% in 2025. Interest rate trends follow at 44%, then global financial system stability at 38%. Worry over trade disputes and tariffs collapsed to 18%. In Latin America, inflation anxiety runs highest of all, at 76%.

To defend purchasing power, allocations have shifted. Public equities now average 30% of portfolios — the largest sleeve — followed by fixed income at 16% and cash at 12%. Over the past 12 months, equities pulled in the biggest net capital increase, with 46% of respondents adding exposure.

Where is the private capital going?

Private markets remain a core pillar. Within private equity, growth equity strategies attract the most interest, with 30% planning to increase allocations. Venture capital follows at 21%, and secondaries at 19%.

Direct investing is now mainstream: 75% of family offices participate. Growth-stage deals (Series C or D) are the most common target at 57%, with pre-IPO opportunities and secondary transactions each capturing 40%. Deal sizes cluster between $1 million and $5 million for 44% of family offices, though 26% of the largest firms — those with wealth above $500 million — write checks of $5 million to $10 million. After AI (51%), healthcare (32%) and real estate (31%) hold solid demand.

Is AI inside the office, not just the portfolio?

Yes, and adoption is moving fast. Forty percent of respondents describe their AI adoption as early-stage, 30% as moderate, and only 10% as advanced. Just 19% report no adoption at all — a marked improvement on last year. The leading use case is productivity: meeting notes and summaries, with 16% using it extensively and 22% implementing it. Among tangible benefits, 67% say AI has dramatically improved the speed of information processing; 35% cite reduced manual work or headcount, and 35% faster due diligence. In investment management, market and macroeconomic analysis leads, with 12% using it extensively.

How exposed are they to operating businesses?

Deeply. Two-thirds of respondents (67%) hold controlling stakes in one or more operating businesses. For banking services tied to those companies, 40% need capital or credit lines. For themselves, 57% lean on securities-based lending or margin facilities — capital efficiency without disturbing the portfolio.

What does this change for succession?

Plenty, because the clock is running. One-third of family offices expect a leadership transition within five years, yet only 17% feel "well prepared" and 34% call themselves "somewhat prepared." The top obstacle is the lack of a clear succession plan (29%), followed by insufficient preparation of future leaders (24%) and the absence of a clear vision and goals (22%).

On developing the next generation, 46% cite "lack of clarity regarding future roles," 42% an "insufficient sense of urgency," and 39% "lack of engagement from the next generation." The remedies in play: participation in family meetings (56%), meetings with advisors (47%), and professional experience outside the family business (44%).

How global is family wealth getting?

More so every year. Thirty-eight percent expect family globalization — living abroad, new residences, additional citizenships — to increase moderately or significantly over five years. In Latin America, 58% expect a global impact. Today, 26% of family offices already operate across multiple jurisdictions and another 14% are considering it. Cross-border needs rank tax coordination first (59%), then asset structuring (43%) and residence or citizenship planning (35%).

Values still anchor the money. Fifty-five percent say family mission and values strongly guide or fundamentally shape investment strategy — rising to nearly 80% among third-generation family offices and beyond. Nearly half maintain sustainable allocations, favoring public equities (23%) and private equity (21%). For philanthropic impact, 25% prioritize networks and learning opportunities, level with intergenerational engagement and legacy building at 25%. In art, 17% would consider working with art advisors for global market intelligence.

The so-what for practitioners: with AI deals dominating direct allocations and a third of leaderships turning over within five years, the firms that pair disciplined check sizes with real succession planning will define the next cohort of leaders.