Single family offices raised their stock allocations to 37% of portfolios in the second quarter, up from 34% in the first quarter, the largest quarterly increase in several years, according to the CNBC Family Office Portfolio Tracker powered by Addepar. The shift came alongside a pullback in private markets and real estate, as private credit funds marked down asset values.
Family offices raised their stock holdings in the second quarter while trimming exposure to real estate and private market investments, according to the latest CNBC Family Office Portfolio Tracker. Single family offices held 37% of their portfolios in stocks in the second quarter, up from 34% in the first quarter.
The increase is the largest in several years and signals continued bullishness on the AI trade and equities, despite fears of a bubble and a highly concentrated market. According to CNBC, Addepar CEO Eric Poirier said the increase was "the biggest quarter-on-quarter shift that we've seen" in three to four years.
The rally behind the shift
The CNBC Portfolio Tracker draws on actual portfolios of hundreds of family offices — the private investment arms of wealthy families — aggregated and anonymized through Addepar, representing more than $1.4 trillion in assets.
This rise in stocks was largely the result of market fluctuations rather than active buying and selling. The S&P 500 rose about 15% during the quarter, powering the stock gains, while declining private market valuations, led by troubles in private credit, brought down alternative allocations. Yet family offices are letting their stock allocations grow as a share of their portfolios rather than rebalancing, which suggests a long-term bullish tilt toward the stock market. Poirier said the AI trade is likely driving much of the interest.
Top holdings and private market markdowns
In private markets, family office allocations to alternatives fell to 46% from 49% in the second quarter, the largest drop in years. Addepar said the decline was mainly driven by private credit funds marking down the values of their assets. Fully 18% of recent vintage private credit funds, those from 2020 or later, have posted markdowns in net asset values, compared with an average of 9% in write-downs for private credit funds with vintages of 2016 or later through the first four years of their lifecycle.
Family office holdings of fixed income held steady at 8%, hedge funds remained at 7%, and other alternatives, which include commodities and collectibles, held at 6%. Their largest segment after public equities was private companies, at 15% of portfolios. Looking ahead to the third quarter, Poirier said the big themes to watch will be interest rates and bonds.
Source: CNBC
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