Global family offices are materially increasing allocations to private credit and infrastructure while reassessing their direct real estate exposure, according to a Reuters report surveying multi-family offices serving ultra-high-net-worth clients. The shift comes as higher-for-longer interest rates and softer valuations in some property sectors prompt chief investment officers to rethink strategic asset allocation rather than make temporary tactical trades.
Ultra-high-net-worth clients are still committing capital to real estate, but investment patterns are changing. Several multi-family offices noted in the Reuters piece that families are pivoting toward niche strategies such as build-to-rent housing, data centers and logistics facilities rather than traditional office towers. This represents a structural evolution in how family offices approach property investment rather than a wholesale exit from the asset class.
Direct and club-style deals alongside operating partners remain popular among family office investors. These structures allow families to exert greater control over leverage decisions, fee arrangements and exit timing compared to passive fund investments. The hands-on approach appeals to principals who want oversight of underwriting standards and asset management decisions during a period of market uncertainty.
Some chief investment officers quoted in the Reuters story describe actively reducing core office and retail holdings in their portfolios. These family offices are redeploying proceeds into lower-risk credit secured by property and infrastructure assets, seeking income with less direct exposure to occupancy risk and property-level volatility. The rotation reflects concern about structural headwinds facing traditional retail and office assets.
Growing interest in opportunistic capital for distressed real estate is emerging across the United States and Europe. Loan maturities and tighter bank lending are creating entry points for patient ultra-high-net-worth capital willing to step into situations where traditional lenders have pulled back. Family offices view the dislocation as a potential source of asymmetric returns for those with flexible mandates and long time horizons.
The infrastructure allocation trend extends beyond real estate-adjacent assets. Family offices are examining a broader range of infrastructure opportunities as they seek stable, inflation-protected income streams that complement their evolving real estate strategies. This includes both digital infrastructure like data centers and traditional regulated assets.
Many family offices are updating investment policy statements to reflect these allocation shifts, according to the Reuters report. The formal policy changes signal that investment committees view the strategic rotation as permanent rather than cyclical. Updated guidelines provide portfolio managers with clear mandates to pursue private credit and infrastructure opportunities while maintaining selectivity in direct real estate.
The overall picture is one of strategic evolution rather than retreat from real estate. Family offices are maintaining capital commitments to property but channeling those commitments through different vehicles and strategies. The emphasis on niche real estate sectors, credit secured by property, and infrastructure suggests a search for resilience and income stability in an environment where traditional core real estate faces valuation pressure and financing constraints.