Family Offices Boost Public Stocks, Shrink Real Estate Holdings: CNBC Tracker

Public stocks are the largest and fastest-growing asset class for family offices, while their real estate assets are shrinking, according to the new CNBC Family Office Portfolio Tracker.

Family offices now manage over $5.5 trillion in wealth globally, rivaling hedge funds in total assets. Yet because family offices – the private investment arms of ultra-wealthy families – aren't required to disclose their investments, their portfolios are largely secret.

CNBC has teamed up with Addepar, a foundational data and AI platform used by financial professionals globally, to provide a regular snapshot of family office portfolios. Addepar's data includes the portfolios of hundreds of family offices, ranging in size from $200 million in assets to over $10 billion, representing a total of $1.4 trillion in assets.

The tracker will be released every quarter, showing how family offices are shifting their investments in stocks, bonds, private equity and other asset classes. It will include comparisons with the previous quarter, the previous year and previous five years, showing both the short-term and long-term trends.

The tracker is useful to family offices and ultra-high-net-worth investors looking for comparisons and benchmarks. It will also be valuable to the fast-growing industry of wealth management firms, advisors and funds vying for family office business.

Family office wealth is expected to top $9 trillion by 2030, according to Deloitte, making the group increasingly powerful players in financial markets and the broader industry.

"Many firms across the wealth and investment ecosystem look to family offices as an important indicator of how sophisticated investors are approaching their strategic and tactical asset allocation," said Eric Poirier, CEO of Addepar.

Poirier said family offices can shed light on ways to balance risk, liquidity, performance and diversification all while navigating changing market environments.

"By bringing together an anonymized and aggregated view of cross-platform holdings, Addepar can help clients understand broader allocation trends and evaluate their own strategies over time," he said.

In first quarter, the Family Office Portfolio Tracker showed the continued importance of public stocks.

Equities were one of the only asset classes that grew as a share of family office portfolios over the past year. Stocks accounted for 34% of portfolios for the family offices covered by the tracker, up from 32% a year ago. There is a strong home bias for U.S. family offices, with 80% of their equity holdings invested in domestic stocks, the review found.

The only other category to show annual growth "other alts," a broad segment that includes mixed allocation of funds, other collective vehicles, commodities and collectibles.

Private equity holdings dipped slightly to 6% while private credit also fell marginally to under 1%. Family office real estate holdings slid by nearly 2 percentage points, now accounting for 7.5% of their portfolios.

Also down slightly over the last year were hedge funds, at 6%, and venture capital at roughly 2%. Their investments in private companies remained sizable but flat, at 16%, as many family offices either own private companies or are investing directly in private businesses.

The broad collection of "alts," defined as every category outside of publicly traded stocks and bonds, accounted for 48% of family office portfolios, while public markets accounted for 52%.

Their holdings of cash and cash equivalents remained at nearly 10%, suggesting family offices want to retain dry powder in the event of a possible crisis or decline in asset prices that could pose a buying opportunity.

Family offices are the ultimate long-term investors, investing for generations rather than individual retirement. They rarely make major changes to their portfolios or react to short-term events. Yet tracking the evolving family office portfolios over time will give some clues into how they view current markets and macro trends.

"Many of these portfolios are intentionally diversified across public and private markets and built around longer investment horizons, particularly across alternatives, so positioning often evolves more gradually over time," Poirier said. "More broadly, the data reflects how family offices are evolving — operating more globally, more institutionally and focusing on diversification, liquidity planning and long-term strategic decision-making across changing market environments."

The tracker will also become more robust over time as Addepar adds more family offices to its platform. More than 1,400 firms — including family offices, RIAs and wealth managers, private banks and institutions across 60 countries — use Addepar to manage and advise on $9 trillion in assets.

Family offices use Addepar primarily to show their vast array of private and public investments in one platform. A large family office can have dozens or even hundreds of private investments, each with unique reporting formats. Addepar's software brings it all together in one place.

A growing number of banks and wealth managers are also using the platform, to better sync with their family office clients.

The platform recently launched "Addison," the company's native AI tool.

"Addepar's view is that AI will augment — not replace — investment professionals," Poirier said. "Increasingly, AI is helping surface actionable insights faster and reduce manual operational work, allowing teams to spend more time focused on long-term planning, strategic advice and deeper relationships with family members."