Bank of America finds 59% of family offices adding private assets

Bank of America reported in its family office study, Building for Generations, that 59% of the families surveyed intend to put more money into private markets over the coming three years, according to Chief Investment Officer.

The bank found that families generally keep a quarter to half of their holdings in alternatives, with buyout funds and direct stakes in operating companies making up most of that. Deals are sourced largely through personal contacts, peer family offices and general partners. Another 31% treat ownership positions as a way to build wealth across generations.

Sports franchises are drawing younger principals in particular, after several leagues loosened limits on outside and minority investors. Four in 10 family offices hold a sports stake. "Sports ownership is one of those areas that are really defined by age," said Charles Simonds, family office strategist at Bank of America, citing 16% participation among baby boomer principals against 27% for millennial and Gen Z principals.

Governance lags the growth. While 83% of families have picked someone to lead the office next, only 27% have written rules for trust distributions. Forty-nine percent called training the next generation a priority, and 64% hold family meetings once or twice a year.

This story was first reported by Chief Investment Officer.