Despite the rather quaint title, family offices — private wealth management firms focused on serving high-net-worth clients to preserve their wealth — manage trillions of dollars worth of assets.
And those assets under management are only projected to grow significantly in the near term. Deloitte estimates that, by 2030, globally, family offices will manage approximately $9.5 trillion.
In other words, family offices have emerged as key players in the financial services industry, and with this growth has come the need to expand the investment options they offer their clients. Where once family offices were primarily associated with more traditional forms of investments, many now encourage their clients to consider more cutting-edge — and even riskier — opportunities such as those grounded in artificial intelligence (AI) and blockchain technology.
“Research shows that AI tops the list of investment opportunities for most family offices,” says Susan Lindeque, CEO of Avestix, a Florida-based investment firm specializing in alternative investments, including companies leveraging AI, quantum computing, and more.
“BNY recently determined that 80% of family offices are including AI-related investments in the recommendations they make to their high-net-worth clients,” she says. “And most family offices told BNY they plan to continue doing so for at least the next five years.”
According to CNBC, Jeff Bezos recently invested hundreds of millions of dollars into AI, making it the primary focus of his family office business, Bezos Expeditions. The media outlet also reports that AI is now a favored investment category for more than three-fourths of family offices, with about 78% saying they plan to invest in AI during the next three years.
This preference for AI makes sense, given recent Bank of New York findings that found corporations around the globe plan to invest more than $1 trillion in AI systems by 2030, making it “one of the swiftest technology adoption cycles in modern times.” The institution’s research also determined that by 2030, approximately 85% of “knowledge workers” will use AI daily.
BNY also found that a sizable portion of family offices are also betting on blockchain-adjacent investment opportunities such as cryptocurrencies — although the enthusiasm is more tempered than that surrounding AI. About 40% of the 189 family offices BNY surveyed “are actively investing in cryptocurrencies or exploring doing so.”
Lindeque quickly points out that “almost as many family offices — 38% — are skeptical about cryptocurrencies, mainly because of the lack of regulatory governance around cryptocurrencies and the public perception that they are vulnerable to cybercrime.”
She says the percentage of crypto-skeptics has increased significantly over the past four years. In 2022, BNY surveyed family offices around the globe and found that about 75% of them took a more favorable view of cryptocurrency investment opportunities.
“Two years can make a big difference,” explains Lindeque. “Much of the ‘shine’ cryptocurrencies once offered investors has been tarnished by the collapse of FTX.”
If public interest in crypto has waned, it might explain why the cryptocurrency industry has poured record amounts of money into the current election cycle. Public Citizen reports that the industry has invested $119 million in support of crypt-friendly candidates running for office in 2024.
Despite any lingering skepticism, BNY found that — for those family offices still bullish on cryptocurrencies — more than half say their enthusiasm reflects a need to keep pace with “new investment trends and investment opportunities.” Another 30% say their interest in crypto is driven by “current leadership or the next generation of the family office,” suggesting perhaps that only newer family offices are endorsing crypto.
CoinDesk, meanwhile, profiled a U.K.-based family office with roots reaching back to 1902 that believes “now’s the time to make a contrarian bet on crypto,” and is doing so by investing approximately $3 million in DeFi and emerging market crypto projects.
Lindeque isn’t surprised to learn family offices are embracing crypto despite any public unease. “The family office landscape has become very competitive,” she says. “As a result, many of these firms have to explore cutting-edge technologies to appeal to a new generation of investors, but they are also leveraging new technologies to improve efficiencies in their practices.”
Indeed, Barrons recently reported that “AI technology is expected soon to facilitate automation of several mundane but critical tasks for family offices…Chief among these mundane tasks is the mountain of paperwork associated with alternative investments, such as real estate, private equity, and venture capital.”
“AI executives are realizing that not only does AI make sense as an investment opportunity, it also offers family offices a way to complete resource-intensive, manual processes that used to take hours to complete into projects that can be completed in minutes,” says Lindeque.
