Citi Wealth's annual survey found 63% of family offices now rank inflation as their top concern, up from 37%. Private credit is the asset they are most inclined to reduce, while public equities and private equity attract new money.
Of every asset class in Citi Wealth's annual family office survey, private credit is the one the wealthiest investors most want less of.
On net, 12% of the 351 family offices Citi surveyed in June and July intend to shrink their private credit holdings over the coming year. No other category drew a more negative reading. The finding comes as wealth-channel private credit funds run by Morgan Stanley and Apollo keep rationing withdrawals under quarterly caps.
The survey's larger shift was in what these firms fear. Inflation was the top concern for 63%, against 37% a year ago. Tariffs and trade conflict, which led the list last year at 60%, fell to 18%. Rate changes were cited by 44%, volatility by 34% and the Middle East conflict by 32%.
The fear has not produced a retreat. The speed of the jump in inflation worries caught Alexandre Monnier by surprise, the head of family office advisory at Citi Wealth said, even as portfolios moved far less. "I think family offices are becoming more sophisticated and see risk management as something more active that allows you to stay invested during periods of uncertainty, instead of having to retrench the way they might have done it historically," he said.
The past year's moves bear that out. Bond allocations were close to flat, with cutters outnumbering buyers by only 3 points. Public equities were the big winner, with a net 34% adding, although 42% did nothing. Private equity and cash tied for next, each with a net 15% increasing exposure.
The next year looks similar. Close to a third, on net, expect to buy more developed-market stocks. Private equity draws a smaller net 10%, split between direct deals and fund commitments. Direct deals are especially popular: 40% want to do more of them and only 11% expect to trim or pause.
Monnier linked the appetite for direct stakes to the next generation. "The next generation is drawn to direct investments, tangible assets, more so than a paper portfolio," he said. "If you own a stake in a business or in real estate, you can touch it. It's across the street."
A few answers break with the usual inflation playbook. Just 11% expect to add commodities, or 3% net, which Monnier called surprising given oil's and gasoline's role as hedges. He suggested some offices may leave those positions to outside advisers. Cash and emerging-market debt tilted toward cuts by only 6 points, a sign, in his view, that offices may want liquid assets on hand for flexibility or protection.
Real estate is mostly a North American story. There, 37% plan to add, compared with 25% of the full sample, and North American offices already hold the most directly owned property and direct private equity. "I think it highlights the appetite, the orientation towards ownership and private market exposure that we see in North America," Monnier said.
For private credit managers, the survey is a signal from a client group that is adding to most other private assets. A net 12% planning to pull back is a modest figure. Whether it becomes actual selling should surface in fund flows and tender results over the next few quarters.