APAC family offices lead on returns as AI, direct deals reshape investing: Citi

KUALA LUMPUR: Asia-Pacific (APAC) family offices are emerging as some of the world's most active and sophisticated private investors, posting stronger portfolio returns while increasing exposure to artificial intelligence (AI), direct investments and active risk management, according to Citi Wealth.

Citi Wealth's 2026 Global Family Office Report, based on a survey of 351 family offices across 41 countries, found that 26 per cent of APAC respondents achieved year-to-date portfolio returns of more than 15 per cent, the highest among regions surveyed.

APAC family offices also set more ambitious return targets, with 22 per cent targeting annual returns above 15 per cent, nearly twice the global average.

The report, compiled by Citi Wealth's Global Family Office Group, which works with more than 1,900 family offices worldwide, surveyed clients in June and July, with APAC accounting for 22 per cent of respondents.

Alexandre Monnier, head of family office advisory at Citi Wealth, said, "As the world around us becomes more complex, family offices are uniquely positioned to build resilient portfolios, reimagine their operations and professionalise in ways that enable their families to achieve ambitious goals."

The strong performance has not translated into complacency, with APAC family offices taking a more active approach to managing market volatility.

About 62 per cent adopted active management while 49 per cent used hedging strategies, both above global averages.

The findings suggest a greater sophistication in risk management. Rather than viewing risk management as a defensive exercise, family offices increasingly approach it actively, as tactical portfolio adjustments rather than significant strategic repositioning.

"Family offices globally are balancing conviction with resilience, opportunity with discipline, and growth with stewardship," said Dawn Nordberg, head of Integrated Client Solutions and the Global Family Office Group at Citi Wealth.

Direct investing is another defining feature of the APAC market, with 79 per cent of respondents participating in direct investments, the highest rate globally.

Internal investment teams were the leading source of direct investment opportunities for 77 per cent of APAC respondents, pointing to greater investment professionalisation within the region's family offices.

AI has emerged as the standout investment theme. Some 80 per cent of APAC family offices identified AI as a primary sector focus for direct investments, alongside interest in healthcare, robotics and software.

APAC family offices also showed the highest level of comfort with digital assets globally, with half reporting no significant barriers to adoption.

At the same time, financial stability and market volatility remain major concerns, cited by 53 per cent and 52 per cent of APAC respondents, respectively.

Bernard Wai, head of Asia for Integrated Client Solutions and Global Family Office at Citi Wealth, said the findings pointed to a maturing APAC family-office sector adopting increasingly institutional investment practices.

"Family offices across Asia Pacific have evolved to become increasingly sophisticated, requiring the talent, setup and governance for a sovereign wealth fund-like investment mindset.

"Whether it is expanding into direct investing programmes, leveraging AI interfaces, or executing cross-border tax-aware transactions, family offices here are taking a more holistic approach to wealth stewardship," he said.

Despite shifting macroeconomic indicators and geopolitical concerns, nearly 90 per cent of respondents reported positive portfolio performance year-to-date, while 41 per cent continue to target annual returns of 7.0 per cent to 10 per cent.

Public equities regained prominence, with nearly half of respondents increasing their exposure during the year, making the asset class the leading destination for new capital.

Private markets, meanwhile, remained a strategic component of family-office portfolios, although investors were becoming more selective and placing greater emphasis on sourcing, expertise and differentiated access.

The report also found that family offices are moving beyond experimentation with AI, deploying it for investment analysis, information management, reporting, workflow automation and decision support.

Rather than relying on AI to generate investment returns, family offices are primarily using the technology to improve productivity, speed up information processing and strengthen due diligence, while retaining human oversight of final decisions.

Citi said family wealth is increasingly international, with 38 per cent of respondents expecting family globalisation to rise in the next five years.

"With many respondents reporting assets, businesses and family members located across multiple jurisdictions, tax coordination, asset structuring, regulatory compliance and cross-border planning are becoming larger responsibilities for family offices.

"Building cross-border expertise will be essential as rising global complexity becomes a foundational aspect of family wealth," it said.

Citi also said succession is emerging as another immediate priority, with about one-third expecting leadership transitions within their family, family office or family business over the next five years.

The survey was launched at Citi Wealth's 11th Annual Family Office Leadership Summit in June, attended by more than 150 family-office leaders from over 25 countries, representing families with an average net worth of US$2.1 billion.