Introduction: The Family Office Landscape in Early 2026
In early 2026, family offices and ultra-wealthy investors manage substantial assets amid a complex environment. Global family office assets under management (AUM) continue to grow, with estimates placing total wealth managed by single-family offices at over $4-5 trillion, based on 2025 surveys showing average AUM per office around $900 million to $1.1 billion. The UBS Global Family Office Report 2025 indicated average family net worth at $2.7 billion, with offices handling $1.1 billion each on average.
Alternatives comprised 42% of portfolios in late 2025 data, including private equity, private credit, and real assets. Direct investments gained traction, with surveys like Citi’s showing seven out of ten family offices making direct private company investments in 2025, and nearly half increasing exposure. Co-investments rose as a preferred entry point, offering shared risk and expertise. Notable shifts included higher allocations to private credit (up to 4-6%) and infrastructure-adjacent assets. These trends, alongside professionalization and next-generation involvement, position family offices for active direct and co-investment strategies in 2026.
Main Predictions for 2026 Allocations and Partnerships
In 2026, family offices will deepen direct deals and co-investments, predicting that over 70-80% of offices engage in direct investing, up from 2025 levels. This growth reflects a desire for control, lower fees, and alignment with family values. Direct deals will focus on growth-stage companies, industrials, healthcare, and sustainable sectors, leveraging operational expertise.
Co-investments will expand significantly, with predictions of 20-30% more activity as families partner with private equity sponsors or other offices for larger opportunities. This approach provides access without full in-house teams, especially for mid-sized offices. Platforms and networks will facilitate club deals, sharing due diligence.
Asset class allocations will tilt toward private markets, with alternatives holding 40-45% of portfolios. Private equity remains core at 20-25%, but with more direct and co-investment portions. Private credit and real assets, including infrastructure like data centers and energy, will see increases for yield and stability. ESG and impact considerations integrate deeply, influencing deal selection in renewables and transition finance.
Partnerships with funds will include negotiated co-investment rights, reducing blind-pool exposure. Ultra-wealthy individuals will use family offices for bespoke direct exposure, often in real estate (direct ownership around 44% in some surveys) and digital assets cautiously. Deployment will prioritize flexibility, with liquidity buffers maintained amid volatility.
Challenges and Risks in Direct Deals and Co-Investments for 2026
Resource constraints pose issues, with understaffing limiting direct programs, especially in smaller offices. Due diligence demands grow for direct deals, requiring sector knowledge that may need outsourcing.
Illiquidity ties capital long-term, with hold periods of 5-10+ years common in private deals. Exit challenges persist if markets slow, delaying returns. Competition for quality direct opportunities intensifies, potentially inflating valuations.
Co-investment risks include misalignment with partners or limited control in decisions. Geopolitical factors and trade tensions disrupt cross-border deals. Regulatory scrutiny on large transactions adds complexity and costs.
Overconcentration in favored sectors, like infrastructure-adjacent tech, risks corrections if growth falters. Personal wealth strategies face succession challenges, with generational differences in risk appetite causing friction.
Opportunities in Direct Deals and Co-Investments for 2026
Direct and co-investments offer potential for higher returns through active involvement and fee savings. Control over terms aligns with family goals, including impact and legacy.
Diversification benefits arise from tailored exposures, complementing public markets. Partnerships access deal flow and expertise, scaling opportunities beyond solo capacity.
Sustainable and transition investments provide dual benefits of returns and purpose, attracting next-generation interest. Improved liquidity in secondaries allows adjustments.
Personal strategies for ultra-wealthy include building internal teams or hybrid models for direct alpha. Networking enhances sourcing, fostering long-term wealth multiplication.
Conclusion: Balanced Outlook for 2026 and Beyond
Family offices and ultra-wealthy investors in 2026 lean toward direct deals and co-investments, offering control and alignment in private markets. Risks like illiquidity and staffing needs demand caution, but opportunities in diversified, purposeful investing support growth. Beyond 2026, trends toward professionalization and collaboration suggest resilient strategies for preserving and expanding wealth across generations.
