North American family offices saw their portfolio returns plummet in 2023 to an average return of 1%, compared with 15% in 2022, according to a survey of 330 single-family offices by RBC Wealth Management and Campden Wealth.
That was largely due to a more conservative investment approach — with only 38% of family offices focused on growth, compared with 48% in 2021; and 18% choosing wealth preservation strategies, compared with 13% in 2021. In addition, family offices reduced costs, spending 22% less on discretionary expenditures and staff salaries. And their CEOs were paid 33% less year over year, averaging $304,000 vs. $454,000 in 2021.
Looking toward the future, an increasing share of family offices— 38% — are choosing wealth aggregation platforms to manage their positions, and 31% aim to grow their positions in technologies like artificial intelligence. They also are focused on succession planning, with 92% wanting to introduce their next-generation members to family values — though 29% of family offices “anticipate their current family heads will resist ceding control in the near future.”
As for investments, private market investments are the largest-held asset class for North American family offices, with an average portfolio share of 29%, compared with 27% in 2022. In addition, 41% of them plan to increase their private equity fund positions. And almost half of North American family offices reported an increase in assets under management, with 12% indicating a significant increase.