Key Takeaways
- • Family offices accounted for 40 per cent of active private capital investors in Australia in 2024, up from 25 per cent in 2022 and 10 per cent in 2020, according to the 2025 Australian Private Capital Yearbook from the Australian Investment Council (AIC) and Preqin.
- • Superannuation funds' share of active private capital investors fell from 48 per cent in 2020 to 13 per cent as of December 2024.
- • Average family office investment in private credit doubled to 4 per cent globally in 2024, with APAC at 5 per cent, and is expected to rise to 5 per cent among family offices adjusting portfolios in 2025, per UBS's Global Family Office Report 2025.
- • Family offices are adopting endowment-style portfolios with significant allocations to private equity, private credit and unlisted infrastructure, according to UBS Global Wealth Management Australia chief of investments Andrew McAuley.
- • Despite US policy uncertainty, some clients are increasing US exposure, with investment flowing to AI, electrification and healthcare themes.
Summary
Fresh data reinforces findings by the Australian Investment Council (AIC) and Preqin that family offices have become the dominant investors in private capital. According to the 2025 Australian Private Capital Yearbook, family offices made up 40 per cent of active private capital investors in 2024, up from 25 per cent in 2022 and 10 per cent in 2020. Over the same period, superannuation funds' share fell from 48 per cent in 2020 to 13 per cent as of December 2024.
UBS's Global Family Office Report 2025, released on a Friday, shows a similar pattern of rising allocations to private markets, particularly private credit. Globally, average private credit investment doubled to 4 per cent in 2024, while the APAC region stood at 5 per cent, second only to South-East Asia at 6 per cent. Among family offices adjusting portfolios in 2025, the average private credit allocation is expected to rise further to 5 per cent. UBS also found that 37 per cent of family offices anticipate a significant or moderate rise in direct private equity or fund investments, and 30 per cent expect a similar increase in private debt exposure.
Andrew McAuley, chief of investments at UBS Global Wealth Management Australia, said family offices have embraced endowment-style portfolios with significant allocations to private equity, private credit and unlisted infrastructure. He noted that open-ended vehicles now give smaller family offices and those with higher liquidity requirements access to traditionally illiquid private assets. McAuley also pointed to increased professionalism in the local market, describing a well-credentialed investment community with sophistication comparable to the superannuation industry.
The UBS report found family offices remain focused on developed markets while reducing cash holdings in favour of developed market equities, seeking structural growth, yield enhancement and diversification, including in generative AI and healthcare. McAuley said that despite commentary about policy uncertainty making the US less attractive, UBS has not observed this, and some clients are more enthusiastically seeking US opportunities, particularly in AI, electrification and healthcare, despite a mildly negative view on the USD.
McAuley identified tariff policy uncertainty, growing US government debt, inflation and geopolitical conflict as top concerns for clients. He said Australia is in relatively good shape, citing manageable impact from current US tariff policy, lower government debt-servicing costs relative to the US, UK, Canada and New Zealand, and falling inflation.
UBS's Global Family Office Report 2025, released on a Friday, shows a similar pattern of rising allocations to private markets, particularly private credit. Globally, average private credit investment doubled to 4 per cent in 2024, while the APAC region stood at 5 per cent, second only to South-East Asia at 6 per cent. Among family offices adjusting portfolios in 2025, the average private credit allocation is expected to rise further to 5 per cent. UBS also found that 37 per cent of family offices anticipate a significant or moderate rise in direct private equity or fund investments, and 30 per cent expect a similar increase in private debt exposure.
Andrew McAuley, chief of investments at UBS Global Wealth Management Australia, said family offices have embraced endowment-style portfolios with significant allocations to private equity, private credit and unlisted infrastructure. He noted that open-ended vehicles now give smaller family offices and those with higher liquidity requirements access to traditionally illiquid private assets. McAuley also pointed to increased professionalism in the local market, describing a well-credentialed investment community with sophistication comparable to the superannuation industry.
The UBS report found family offices remain focused on developed markets while reducing cash holdings in favour of developed market equities, seeking structural growth, yield enhancement and diversification, including in generative AI and healthcare. McAuley said that despite commentary about policy uncertainty making the US less attractive, UBS has not observed this, and some clients are more enthusiastically seeking US opportunities, particularly in AI, electrification and healthcare, despite a mildly negative view on the USD.
McAuley identified tariff policy uncertainty, growing US government debt, inflation and geopolitical conflict as top concerns for clients. He said Australia is in relatively good shape, citing manageable impact from current US tariff policy, lower government debt-servicing costs relative to the US, UK, Canada and New Zealand, and falling inflation.
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