Family Offices Shift Portfolios Toward Public Tech Equities as AI Trade Surges, Data Shows

Single family offices expanded their portfolio allocations to publicly traded equities during the second quarter while trimming exposure to real estate and private market assets, according to data from wealth management platform Addepar, first reported by CNBC Business. The movement was heavily influenced by ongoing investor enthusiasm for artificial intelligence and mega-cap technology companies, marking the largest quarter-over-quarter shift toward public equities observed in several years among ultra-high-net-worth investment entities.

The findings, published in the CNBC Family Office Portfolio Tracker, draw on anonymized and aggregated portfolio records representing more than $1.4 trillion in assets across hundreds of single family offices worldwide. During the second quarter, single family offices held 37% of their total assets in public stocks, up from 34% recorded in the first quarter. Addepar Chief Executive Officer Eric Poirier pointed out that the three-percentage-point increase reflects an expanding tolerance for public equities, describing the shift as the single largest quarter-on-quarter movement in asset allocation seen by the platform over the past three to four years.

Rather than resulting from massive capital liquidations or aggressive portfolio restructuring, the movement between asset classes was primarily driven by market valuation divergences. The S&P 500 rose approximately 15% during the second quarter, lifting the overall value of public equity holdings. Simultaneously, alternative asset classes—a broad category including private equity, venture capital, private credit, real estate, and direct investments in private firms—dropped from 49% to 46% of total portfolio share, marking the steepest multi-year drop for alternatives in the tracker's history.

Major technology and artificial intelligence leaders accounted for the most widely held equities in family office portfolios during the quarter. Microsoft was the most common stock holding, present in 77% of all monitored family office portfolios, followed closely by Amazon and Alphabet at 76% each, Apple at 70%, and Nvidia at 69%. Poirier stated that the overarching investment thesis surrounding artificial intelligence is playing out predominantly through major public equity markets rather than private venture vehicles, prompting family offices to let their equity allocations grow rather than trim gains to rebalance.

The decline in private market exposure was heavily impacted by asset markdowns across private credit, venture capital, and real estate holdings. According to Addepar, 18% of private credit funds originating in 2020 or later recorded net asset value markdowns during the quarter. That figure represents double the historical average write-down rate of 9% seen in private credit funds with vintages of 2016 or later through their first four years. Similar valuation adjustments affected venture capital and real estate funds, depressing their overall share of family office balance sheets.

Poirier noted that the observed shift does not reflect underlying capital movement or net redemptions by family offices from private managers. Instead, family offices chose not to rebalance away from their appreciating equity positions while absorbing write-downs on their alternative holdings. Meanwhile, cash positions dropped by less than 1 percentage point over the quarter, indicating a slight push by wealthy families to put uninvested liquidity into active market opportunities.

Allocations across several other investment categories remained virtually unchanged during the second quarter. Direct investments in private companies constituted the second-largest component of family office balance sheets after public equities, holding firm at 15% of portfolios. Fixed income holdings remained stable at 8%, hedge fund allocations held steady at 7%, and miscellaneous alternative assets—including commodities and collectible items—remained unchanged at 6%.

Looking forward to the third quarter, Poirier indicated that shifts in interest rates and broader bond market conditions will serve as primary indicators for family office behavior. He observed that the fixed income environment remains highly dynamic, suggesting that future reallocation decisions may hinge on macroeconomic policy shifts and yield developments across global debt markets.