Family Office Asset Allocation
Family office asset allocation is how a family distributes capital across public and private exposures to balance growth, liquidity, and risk.
Definition
Definition Asset allocation describes how capital is split across categories like public equities, fixed income, private equity, venture, private credit, real estate, and cash reserves. In family offices, allocation is often constrained by existing concentrated holdings and by real cash needs (taxes, spending, commitments). Allocation is not a static pie chart—it’s a practical tool to ensure the family can meet obligations while compounding wealth. Allocator Context Families often run a “barbell” without calling it that: a liquidity reserve plus long-duration private positions. They may also treat real estate as both investment and lifestyle utility. Understanding this reality matters because it affects how much additional illiquidity a family can take and how they evaluate drawdowns. Decision Authority CIO typically manages allocation day-to-day, with principal oversight on major shifts. Some families have formal IPS constraints; many operate with implicit boundaries. Why It Matters for Fundraising Asset allocation tells you where you fit and whether capacity exists. If the family is already heavy in illiquids, your pitch must address liquidity and pacing. If they’re under-allocated to your sleeve, your pitch can be framed as completing the portfolio role. Key Takeaways Allocation reflects liquidity and concentrated holdings constraints Often dynamic and preference-driven Determines whether new commitments are feasible Portfolio-role framing improves conversion