Family Offices Name AI Top Direct Investment as 89% Report Gains in 2026

Artificial intelligence attracts 51% of family offices making direct investments, while inflation replaces tariffs as the dominant macroeconomic concern.

By the Family Office Real Estate Daily Desk·Monday, October 26, 2026·2 min read

Editorial summary of reporting byFunds Society Our editorial standards →

The answer · checked against Funds Society

What are family offices investing in directly and how are they performing in 2026?

Citi Wealth's 2026 Global Family Office Report, drawing on 351 family office executives across 41 countries, found that 89% reported positive portfolio returns so far in 2026. Artificial intelligence ranked as the top destination for direct investments, selected by 51% of participants. Inflation replaced tariffs as the dominant macroeconomic concern, cited by 63% of respondents, up from 37% in 2025.

Key facts

Citi Wealth's '2026 Global Family Office Report' surveyed 351 family office executives across 41 countries.
89% of family offices reported positive portfolio returns so far in 2026, according to Citi Wealth's report.
Artificial intelligence was named the top destination for direct investments by 51% of family office participants, according to Citi Wealth's 2026 Global Family Office Report.
Inflation was cited as the dominant macroeconomic concern by 63% of respondents in Citi Wealth's 2026 report, up from 37% in 2025.
Concern over trade disputes and tariffs dropped dramatically to 18% of respondents, according to Citi Wealth's 2026 Global Family Office Report.
75% of family offices participate in direct investment, according to Citi Wealth's 2026 Global Family Office Report, with growth stage (Series C or D) being the most frequent target area at 57%.

Family Offices Name AI Top Direct Investment as 89% Report Gains in 2026 — Image: editorial illustration · Story sourced from Funds Society

Artificial intelligence has become the top sector for direct investments by family offices, with 51% targeting the category, according to Citi Wealth's 2026 Global Family Office Report. The survey of 351 family office executives across 41 countries found that healthcare attracted 32% of direct investors and real estate 31%. Three-quarters of family offices participate in direct investing, with 57% focusing on growth-stage companies at Series C or D and 40% pursuing pre-IPO opportunities.

Nearly nine out of ten family offices reported positive portfolio returns so far in 2026. Sixty percent posted gains of up to 10%, while 13% reported appreciation exceeding 15%. In Asia-Pacific, 26% of family offices achieved gains above 15%. Forty-one percent of family offices target annual returns of 7% to 10%, while 20% aim for 5% to 7% and 18% seek 10% to 13%. In Asia-Pacific, 22% target returns above 15%.

Inflation emerged as the dominant macroeconomic concern, cited by 63% of respondents, a sharp increase from 37% in 2025. Interest rate trends ranked second at 44%, followed by global financial system stability at 38%. Concern over trade disputes and tariffs dropped to 18%. In Latin America, inflation concerns reached 76%, the highest level reported.

Family offices adjusted strategic allocations in response, with publicly traded equities representing the largest average allocation at 30% of portfolios, followed by fixed income at 16% and cash at 12%. Over the past 12 months, equities attracted the largest net capital increase, with 46% of respondents increasing their exposure.

In private equity, 30% of family offices plan to increase allocations to growth equity strategies, followed by venture capital at 21% and secondary transactions at 19%. The preferred deal size for direct investments ranges between $1 million and $5 million for 44% of family offices. Among the largest firms, those with wealth exceeding $500 million, 26% target check sizes between $5 million and $10 million.

Adoption of artificial intelligence as an operational tool has accelerated. Forty percent of respondents describe their AI adoption as early-stage, while 30% report moderate adoption and 10% report advanced usage. Only 19% indicate no adoption, an improvement from last year. The leading use case is generating meeting notes and summaries, with 16% reporting extensive use and 22% in implementation. Sixty-seven percent said AI has dramatically improved the speed of information processing, while 35% cited reduced manual work and 35% cited faster due diligence.

Leadership succession is emerging as a pressing issue, with one-third of family offices expecting a transition within the next five years. Only 17% feel well prepared, while 34% consider themselves somewhat prepared. The primary obstacle is the lack of a clear succession plan, cited by 29%, followed by insufficient preparation of future leaders at 24% and lack of a clear vision for the future at 22%. When developing the next generation, 46% cite lack of clarity regarding future roles as the biggest hurdle, followed by insufficient sense of urgency at 42% and lack of engagement from the next generation at 39%.

The Deployment Angle

Family Office Real Estate Daily Desk · our analysis, not the source's

The shift to direct investments in AI and growth-stage companies favors a co-GP structure or a programmatic joint venture with a specialist manager over blind-pool LP commitments. At deal sizes of $1 million to $5 million, a family office can secure board representation and information rights that are unavailable in a commingled fund. The Citi data suggests that firms with more than $500 million in wealth are writing larger checks, $5 million to $10 million, which implies they are anchoring or leading rounds rather than following. A family office principal should underwrite whether the internal team has the sector expertise to diligence AI deals at that pace, or whether the smarter route is a separate account with a technology-focused growth equity firm that can source and vet deals on a standing mandate.

The 63% inflation concern and the corresponding shift into equities argues for scrutinizing real estate exposure, which at 31% of direct investments still ranks third but is vulnerable to cap-rate expansion if rates remain elevated. Family offices that have increased equity allocations by 46% over the past year have effectively made a duration bet. If inflation proves stickier than the 7% to 10% annual return targets imply, those portfolios will face a drawdown in fixed income and a repricing in growth equities. The arithmetic matters: a 60% gain-reporting rate with 13% exceeding 15% suggests the median return is closer to 8%, not the 10%-plus that one-fifth of respondents are targeting. Price in a gap between aspiration and outcome when modeling liquidity needs for the next 24 months.

The succession risk is acute and underpriced. One-third of family offices expect a leadership transition within five years, but only 17% feel prepared. That gap creates forced-sale risk in illiquid holdings and disruption in GP relationships if the next generation lacks context on existing commitments. A family office principal should audit whether the current portfolio can survive a leadership change: are the private equity commitments documented in a way that a successor can understand the pacing and capital calls, and are the direct investments in operating businesses governed by shareholder agreements that survive a family transition. The Citi data shows 67% hold controlling stakes in operating businesses, which means succession planning is not just a portfolio question but an enterprise-governance question. Avoid new five-year lockups in private funds until the succession plan is written and the next generation has sat in on at least two full investment committee cycles.

Questions this story answers

01Which sectors are family offices targeting most for direct investments in 2026?

According to Citi Wealth's 2026 Global Family Office Report, artificial intelligence is the top destination for direct investments, selected by 51% of participants. Healthcare ranks second at 32% and real estate third at 31%. The preferred deal size for 44% of family offices ranges between $1 million and $5 million.

02How are family offices performing financially in 2026?

Citi Wealth's 2026 Global Family Office Report found that 89% of family offices reported positive portfolio returns so far in 2026. Nearly 60% reported gains of up to 10%, while 13% reported appreciation exceeding 15%. The Asia-Pacific region led, with 26% of family offices achieving gains above 15%.

03What is the biggest macroeconomic concern for family offices in 2026?

According to Citi Wealth's 2026 Global Family Office Report, inflation emerged as the dominant macroeconomic concern in 2026, cited by 63% of respondents, a significant jump from 37% in 2025. Interest rate trends followed at 44%, and global financial system stability at 38%. Concern over tariffs dropped to 18%.

04How are family offices using artificial intelligence in their operations?

Citi Wealth's 2026 Global Family Office Report found that 40% of respondents describe their AI adoption as early-stage and 30% report moderate adoption. The leading use case is generating meeting notes and summaries. 67% said AI has dramatically improved the speed of information processing, and 35% cited faster due diligence as a benefit.

05How prepared are family offices for leadership succession?

Citi Wealth's 2026 Global Family Office Report found that one-third of family offices expect a leadership transition within the next five years, but only 17% feel 'well prepared' and 34% consider themselves 'somewhat prepared.' The primary obstacle cited was the lack of a clear leadership succession plan, named by 29% of respondents.

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