Global Ultra-Wealthy Family Offices Begin to Divest from US Assets
A major shift is underway in the global investment landscape. According to the latest UBS Global Family Office Report, around 60% of family offices — wealth management firms for ultra-wealthy families — plan to make strategic changes to their investment allocations within the next year. This figure has more than doubled compared to the average of the past five years.
The key trend is these major investors reducing their US asset holdings and shifting capital to emerging markets, including Latin America and Africa.
Geopolitics and AI Bubble Fears
John Mathews, UBS Head of Private Wealth Management for the Americas, states that investor concerns have shifted. Last year, trade tariffs were the main worry, but now the focus is on global geopolitical tensions, government debt, and long-term high interest rates.
Factors driving capital outflow from the US include:
Excessive concentration in US stock markets.
Concerns over an AI technology bubble.
Volatile economic policies and rising bond yields.
Sentiment of US dollar depreciation.
De-dollarisation
The report also highlights concrete efforts to reduce exposure to the US dollar, often referred to as de-dollarisation. Over a quarter of family offices plan to reduce holdings of dollar-denominated assets. In their place, Swiss francs and euros are the primary currencies for diversification.
Two-thirds of respondents anticipate the dollar’s role as the world’s primary reserve currency will diminish, driven by uncertainty from prolonged conflicts such as the war in Ukraine and Middle East tensions involving Iran.
Divergence between US and Global
Notably, there’s a sharp divergence between US-based and international wealth managers. US family offices are increasingly concentrating on domestic assets, rising from 86% to 88%. Conversely, non-US investors, particularly from China and Western Europe, are repatriating capital to their home regions or seeking opportunities in non-US markets. For instance, Chinese family offices now allocate nearly half their assets to Western Europe.
Beyond emerging markets, infrastructure and gold are increasingly favoured for portfolio resilience, while cash and real estate allocations are being gradually reduced.