Family offices reposition for growth but continue | Australian Markets

The balancing act between defensive positioning and growth alternatives has now unfold to household offices as they rework their investment strategy amid unceasing world volatility, in response to new information from Schroders.

The 2025 Schroders Global Investor Insights Survey discovered 90 per cent of subtle traders cited persistent uncertainty in US international coverage as a key geopolitical risk that impacts investment decision-making, adopted by worsening China-Taiwan relations (53 per cent), and armed battle in Europe and the Middle East (each 36 per cent).

Theone Star, Head of Private Wealth at Schroders Australia, stated the information confirmed a profound shift within the investment mentality of household offices given these perceived dangers to their portfolios, with many turning to personal markets and returning to lively management methods to navigate.

“We are seeing a notable shift in how family offices approach portfolio construction. Inflation, unpredictable central bank policies and geopolitical risks have created an environment where the traditional investment playbooks are no longer suitable,” Star stated.

“Over half (56 per cent) of household offices determine building ‘portfolio resilience’ as their major investment goal for the subsequent 12 to 18 months. Nearly half (46 per cent) of respondents anticipate decreasing their risk urge for food, whereas solely 17 per cent plan to increase publicity to risk.

“Policy associated dangers have additionally emerged as a main concern, with uncertainty round rates of interest, regulatory modifications, and election-driven market volatility prompting a reassessment of asset allocation.

“In response, household offices are more and more turning to personal markets, with non-public equity, real estate, and infrastructure investments turning into integral to attaining a balanced portfolio.

“Private assets provide access to high-growth opportunities with lower correlation to public market fluctuations, but perhaps more importantly, these assets offer greater control over investments, which is particularly valuable in periods of market turbulence.”

Sector-specific non-public equity (52 per cent) and small/mid cap buyouts (61 per cent) have been extremely favoured among the many survey respondents as the highest methods offering the best return potential. Over 80 per cent of household offices surveyed additionally cited non-public debt and direct lending as offering the strongest risk-adjusted returns.

The analysis additionally confirmed a growing choice for lively management after a current dip in sentiment amongst traders, with 74 per cent of household offices saying they have been assured in “active managers’ ability to deliver value, trusting specialist approaches and the ability to seek outperformance”. Over 85 per cent stated they’re prone to increase their allocations to lively methods in 2025.

Star stated household offices additionally seemed to take care of the steadiness between defensive allocations and rising growth alternatives, with investments in digital belongings, enterprise capital and thematic methods rising as a end result of incorporating youthful relations’ pursuits and objectives.

“This is precisely the type of market where active managers can deliver real value – active has the edge,” Star stated.

“The potential to determine mispriced belongings, shortly regulate positions, and capitalise on dislocations is essential in as we speak’s panorama.

“The most successful family offices will be those that combine disciplined risk management with the flexibility to capitalise on emerging opportunities. By maintaining a balanced approach, investors can position themselves for ongoing growth.”