Family Offices Are Clamoring for AI Investments
Wealthy family offices shift away from traditional VC funds to buy direct AI shares, with alternative investments reaching 42% per UBS 2026 report.
Stock photo for illustration only, not from the actual event
- Wealthy families bypass traditional VC funds for direct AI investments.
- Alternative assets reach 42% of average portfolio in UBS 2026 report.
- Total family office assets projected to hit $9.5 trillion by 2030.
Wealthy families who manage their personal fortunes through family offices are finding the math behind artificial intelligence investments extremely compelling, according to Djoann Fal, a family office advisor and investor at Atlas Capital in San Francisco.
Given the soaring valuations and return potential in the AI sector, family offices are eager to get involved. More importantly, their strategy is shifting away from traditional investments through venture capital fund managers. Instead, they are increasingly acquiring existing shares in private companies directly from current shareholders or executing standalone deals to gain exposure to top-tier AI startups without locking up capital for a decade.
Their financial firepower is substantial. A 2024 Deloitte report showed that family offices oversaw $5.5 trillion in wealth that year and projected that figure to climb to at least $9.5 trillion by 2030.
Stock photo for illustration only, not from the actual event
Highlighting this appetite for riskier yet potentially rewarding assets, UBS’s 2026 Global Family Office Report surveyed 307 family offices globally with an average net worth of $2.7 billion and found that alternative investments now make up 42% of the average portfolio.
Bypassing fund managers allows family offices to eliminate hefty intermediary fees and retain complete control over their capital allocation, signaling a broader institutional confidence in private tech markets despite the inherent execution risks.
However, analysts note that direct investing has cyclical precedents. Activity grew steadily through the late 2010s and spiked in 2021, when direct deals reached 13% of the average portfolio before rising interest rates and cooling returns triggered a sharp 53% drop in M&A volume by late 2023, hitting a decade low by early 2025.
Source: TechCrunch
Found something wrong in this article? Report an issue with this article
Comments
Leave a Comment