New data from iCapital, an alternative investment marketplace, shows that family offices are increasingly turning to alternative investments, with over 40% of their portfolios now allocated to alternatives. Private credit and private equity are the top choices, reflecting a growing trend in how these wealthy families manage their assets.
“With family offices continuing to focus on being investment specialists, the need for outsourced services in managing off-platform alternative-investment data has also increased — most often legacy offline alts positions,” said iCapital Managing Director Steve Houston. “Anecdotally, with iCapital’s recent acquisition of Mirador, the data reporting specialists within that division have seen allocations to alternatives among its family office clients increase over the past five years to over 40%.”
iCapital has hit $200 billion in AUM and its platform offers access to more than 1,630 funds from over 600 asset managers. Data shared with Crain Currency shows that in the second quarter of this year, private credit accounted for about 44% of investor allocations as the top alternative segment on iCapital, followed by private equity at about 35%, real assets at 15% and hedge funds at 8%.
Clients now maintain over 100,000 alternative positions through iCapital, double the total in 2021. iCapital’s family office investment spread aligns with a 2024 survey from JP Morgan, which found that the average family office portfolio allocates 45% to alternative assets.
“As transparency, education and technology have modernized the alts investing experience and as alternative fund structures have evolved, family offices continue to allocate,” Houston said. “This demand has been driven not only by market forces — need for less volatility, interest in broader diversification — but also easier access through alts tech platforms.”