Family offices are private investment firms that manage the assets of wealthy families. These entities can spread across nearly any asset class, including public equities, private companies, real estate, loans, and collectibles. Their allocation decisions are closely watched because they show how very large, flexible pools of capital are responding to markets.
This shift matters because these sophisticated investors already have substantial access to private deals, yet they still chose to increase their public market exposure.
Part of the increase comes down to simple math.
Beyond market performance, the artificial intelligence boom is attracting investor attention. "The AI thematic bet is getting so much action and so much activity, and it's being expressed in large part in public markets versus private markets," Poirier explained.
Meanwhile, private investments are losing some of their appeal.
Some private bets are struggling, particularly in the credit space. Private credit funds that make loans outside the traditional banking system have faced challenges. Among private credit funds launched in 2020 or later, 18% have marked down their net asset values, meaning their investments are worth less on paper than initially valued.
For comparison, private equity and venture capital funds started in 2016 or earlier experienced only a 9% average markdown rate during their first four years. The higher markdown rate among newer credit funds suggests deteriorating performance in this segment.
Real estate and venture capital funds have also seen valuation reductions, making private investing less attractive relative to a stock market that continues reaching new highs.
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Poirier noted that the shift isn't primarily about money flowing out of private funds. "We're not actually seeing changes in inflows or outflows," he said. Instead, the change reflects where family offices are choosing to mark their private holdings.
The public stock portfolios of family offices heavily favor mega-cap technology companies that are driving the AI trade. Among family offices surveyed:
This concentration in large tech names highlights how the AI boom is playing out in public markets, where everyday investors can participate, rather than solely in private markets that remain accessible only to institutional players.
The remainder of family office allocations remained relatively stable, with fixed income at 8%, hedge funds at 7%, and other alternatives such as commodities and collectibles at 6%.
The fact that family offices - investors with virtually unlimited access to private opportunities - are increasingly choosing public stocks sends a meaningful signal about where they see the best risk-adjusted returns. It also demonstrates that public markets remain relevant even for the world's wealthiest investors.
Looking ahead, interest rates will likely play a key role in determining whether this trend continues. Poirier described the fixed-income environment as "very dynamic right now," suggesting that bond markets could present competing opportunities in the coming quarters.
For now, the message is clear: public equities, particularly technology stocks, remain the preferred vehicle for capturing growth in an AI-driven market environment.
