Latest portfolio tracking data reveals that family offices, the private investment vehicles for ultra-high-net-worth individuals, increased their equity holdings in the second quarter while scaling back exposure to real estate and private markets. The shift comes as private credit funds experienced asset write-downs, according to the newest Family Office Portfolio Tracker Report.

The data, provided by Addepar, a data and AI infrastructure platform used by financial professionals globally, covers hundreds of family offices with a combined managed asset total of $1.4 trillion. The report shows that single-family offices lifted their equity allocation to 37% of portfolios in the second quarter, up from 34% in the first quarter.

The increase in stock holdings represents the largest quarterly jump in several years. Despite ongoing concerns about market bubbles and high market concentration, the data suggests family offices continue to show conviction in the AI trade narrative and public equities broadly. "You can interpret this as family offices being more willing to overweight public market stocks," said Eric Poirier, CEO of Addepar. "The increase in public equity exposure is the largest quarterly allocation shift we have observed over the past three to four years."

This tracker provides a direct window into the holdings of single-family offices, which are the private investment arms of wealthy families. While most family office investment information relies on survey responses, Addepar's data is drawn from the actual portfolios of hundreds of family offices, aggregated and anonymized, covering more than $1.4 trillion in total assets.

As equity weightings rose in the second quarter, allocations to private markets and real estate declined. Combined exposure to unlisted companies, property, private equity, venture capital, and private credit fell by 3 percentage points. Cash holdings also dipped slightly during the period, by less than 1 percentage point, indicating that institutions leaned toward putting more capital to work in the market.

A 3-percentage-point shift from alternative assets into stocks represents a significant move for family offices. It also challenges the long-held assumption that the super-rich prefer niche alternative assets over the public stocks available to everyday investors. However, much of this change stems from market movement rather than active buying or selling.

The US stock market rallied strongly in the second quarter, with the S&P 500 gaining roughly 15% during the period, which boosted equity values. Meanwhile, private market valuations, led by distress in private credit, weighed on alternative asset weightings. Family offices did not engage in rebalancing, allowing stocks to rise passively within their portfolios, reflecting a longer-term bullish tilt toward equities.

Poirier noted that the AI investment theme has largely driven this enthusiasm. "The AI investment theme is running hot, and a lot of that positioning is happening in public markets rather than private markets," he said. The top five most widely held stocks among family offices in the second quarter were Microsoft (held by 77% of family offices), Amazon, Alphabet (76%), Apple (70%), and Nvidia (69%).

On the private market side, family office allocations to alternatives fell from 49% to 46%, marking the largest decline in years. Addepar attributed the drop primarily to asset write-downs in private credit funds. The data shows that 18% of newly issued private credit funds established in 2020 or later recorded net asset value markdowns, compared with an average of just 9% for funds founded after 2016 during their first four-year cycles.

Poirier noted that real estate and venture capital funds also experienced valuation declines. "We are not seeing significant inflows or outflows; it is more about family offices marking down the valuations of their private assets," he explained. Fixed income allocations held steady at 8%, hedge funds remained at 7%, and other alternative assets such as commodities and collectibles stayed at 6%.

Excluding public stocks, the largest investment segment for family offices is unlisted companies, representing 15% of portfolios. Looking ahead to the third-quarter family office tracker report, Poirier said the focus will be on interest rates and the bond market. "The rate environment and fixed income markets are moving very quickly right now," he said.