Key Highlights

  • A record 60% of family offices plan to change portfolio allocations, up from previous highs below 37%.
  • Survey of 307 offices with average assets of $2.7 billion reveals near-universal AI exposure but no new purchases.
  • Investors pivot to gold, emerging market equities, and infrastructure while reducing real estate and private equity.
  • Majority position for geopolitical conflict, debt crisis, and financial market turmoil as top risks.

Ultra-conservative institutional investors are stepping back from artificial intelligence stocks, signaling caution in the sector even as markets remain bullish. A new report reveals family offices, long-term wealth managers for the ultra-wealthy, are reducing exposure to AI despite existing holdings, while shifting capital into defensive assets amid rising geopolitical and financial risks.

What Happened

The latest survey of 307 family offices, each managing an average of $2.7 billion, shows a historic shift in strategy. A record 60% of respondents plan to adjust their portfolios, a sharp increase from previous highs that never exceeded 37%. While nearly all offices already hold AI-related investments, almost none intend to increase exposure, marking a stark reversal from the sector’s recent momentum.

Why It Matters

Family offices are often seen as a bellwether for institutional sentiment due to their long-term horizons and risk-averse nature. Their retreat from AI suggests growing skepticism about the sector’s near-term prospects, even as retail and hedge fund investors continue to pile in. The pivot toward gold, emerging market equities, and infrastructure reflects broader concerns about market stability and currency devaluation.

By the Numbers

The survey, conducted by a major global bank, polled 307 family offices with combined assets under management in the trillions. A record 60% now plan to reallocate capital, up from historical peaks below 37%. While AI remains a common holding, new purchases have stalled, with investors instead favoring gold and infrastructure as hedges against geopolitical and financial crises.

Market Context

The shift comes as AI stocks have surged on expectations of sustained growth, but family offices appear unconvinced. Their caution aligns with broader market unease over rising interest rates, debt levels, and geopolitical tensions. The move away from private equity and real estate, traditionally favored by these investors, underscores a defensive posture, with gold and emerging markets seen as safer havens.

What's Next

If family offices maintain their current stance, AI stocks could face downward pressure from reduced institutional demand. Meanwhile, gold and emerging market assets may see increased inflows as conservative investors seek stability. The report’s findings suggest a potential divergence between retail and institutional sentiment, with the latter bracing for turbulence ahead.

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.