The investment strategy of ultra-high-net-worth individuals is undergoing a major shift from stocks to cryptocurrencies, according to a BNY report.

## Family Office Investment Trend Survey

A recent report on investment trends for family offices published by BNY Mellon, a major American financial institution, revealed a significant shift in investment strategies among ultra-high-net-worth individuals. There is an active shift from investments in publicly traded stocks to alternative investments, including private markets and cryptocurrencies.

The “2025 Single Family Office Investment Insights” report by BNY Wealth provides a detailed analysis of the investment strategies, asset allocations, risk tolerances, and operational practices of 282 of the largest single family offices (SFOs) in the world. Family offices are organizations that specialize in asset management and financial planning for wealthy individuals and families, while single family offices offer private asset management services targeted at a single family.

The survey was conducted from January to February this year, targeting 282 investment professionals from family offices around the world. The regional distribution of respondents is as follows: 63% from North and South America, 26% from Europe, the Middle East, and Africa, and 9% from the Asia-Pacific region. In terms of assets under management, the largest group, at 44%, consists of those with $250 million to $499.9 million (approximately ¥36 billion to ¥71.4 billion), followed by 22% with $500 million to $999.9 million (¥71.6 billion to ¥143 billion), 24% with $1 billion to $4.9 billion (¥143.2 billion to ¥701.6 billion), and 10% with over $5 billion (¥716 billion).

The family office’s portfolio is built around private equity, publicly traded stocks, and real estate, known as the “Big 3”, with the following allocation.

• 28%: Private equity (funds, direct investments, venture capital)
• 15%: Listed Stocks
• 13%: Real Estate

Publicly traded stocks continue to play an important role in portfolios, but are down 28% year-over-year. The move is seen as a rebalancing move against the backdrop of concerns about the high valuation level of the U.S. stock price (up 67%). In this year’s survey, investments in publicly traded equities have declined, regardless of the size of family offices, with 41% saying they do not plan to change their allocation.

In contrast, large family offices with operating assets of over $1 billion reported that two-thirds plan to increase their allocations to private equity funds this year. This represents a significant increase of about 70% compared to the previous year. More than half of family offices with less than $1 billion plan to expand their exposure to private equity funds, but the increase rate is limited to 15% year-on-year.

In real estate investment, the demand for the construction of AI data centers and the trend of returning to offices are driving factors for the growth of commercial real estate. Additionally, there is an increasing demand for investment in real estate as an effective hedge against inflation.

Additionally, in the private market, the increasing interest from family offices outside the United States (73%) is driving attention towards growth equity. Its importance is rising as a means of access to investments in growth areas such as AI, healthcare reform, and energy transition.

Increased interest in cryptocurrency investment

There has been a significant change in the investment stance towards cryptocurrencies. 74% of family office professionals reported that they have already invested in cryptocurrencies or are considering doing so, marking a substantial increase of 21% over the past 12 months.

In last year’s survey, attitudes toward cryptocurrencies were divided, with 38% saying they had no interest in investing in cryptocurrencies at all. However, 2024 has been a major turning point, with the approval of Bitcoin spot ETFs by the U.S. Securities and Exchange Commission (SEC) and the birth of a crypto-friendly Trump administration.

Seventy-seven percent of respondents said that their willingness to invest in cryptocurrencies has increased following the results of the U.S. presidential election. (86% in the U.S. only, 69% outside the U.S.)

Looking at the amount of managed assets, 84% of family office professionals with managed assets of over $1 billion responded that they are more likely to consider investing in cryptocurrencies in light of the results of the U.S. presidential election. In contrast, for family offices with managed assets of less than $1 billion, the figure was 75%.

As a motivation for newly becoming interested in cryptocurrencies, 44% responded that the cryptocurrency sector offers excellent investment opportunities. 41% cited the current management’s interest from family offices, and 37% mentioned interest from the next generation.

Notably, while the number of experts interested in cryptocurrencies but not yet invested has significantly increased by 367% year-on-year, the proportion of experts who are indifferent to or do not invest in cryptocurrencies has decreased to 24% (a 36% year-on-year decrease). This indicates that the skeptical attitude towards cryptocurrencies is waning.

Sinead Colton Grant, the Chief Investment Officer of BNY Wealth, pointed out the clarification of regulations as the background for the change in stance towards cryptocurrency investments. She analyzed that the improvement in regulatory transparency contributes to the creation of a sense of security regarding cryptocurrency investments.

Investment targets unique to the wealthy class

High-end assets such as art and watches also play an important role in the portfolios of family offices as elements of a decentralized investment strategy.

One-third of investment professionals reported holding assets with low correlation to traditional financial assets, such as luxury watches, art, and sports-related investments. The report points out that the rise of new investment opportunities, such as ownership of professional sports teams and media broadcasting rights, indicates further growth potential for this asset class in the future.

In addition, against the backdrop of growing concerns about long-term inflation, luxury assets are also attracting attention as an inflation hedge. Since such real assets exhibit a different pattern of value fluctuations than fluctuations in financial markets, they are expected to have a risk diversification effect on the entire portfolio.