How Family Offices and Endowments Use Private Markets

A long-horizon practice, not a model to copy

In its Global Family Office Report 2025, UBS Global Wealth Management surveyed 317 of its family-office clients, with participating families reporting an average net worth of US$2.7 billion and offices managing an average of US$1.1 billion. For 2024, those offices allocated 21% of strategic assets to private equity — 11% in direct investments and 10% in funds or funds of funds — and 44% to alternative asset classes as a group. U.S. family offices in the same survey allocated 27% to private equity ^[1]. These are survey snapshots of a UBS-client sample at a stated date. They describe what that group held, not what any reader should hold.

The 2025 NACUBO-Commonfund Study of Endowments, covering 657 U.S. colleges, universities and affiliated foundations with US$944.3 billion of assets in fiscal year 2025, tells a similar story at an institutional scale. On a dollar-weighted basis, private and alternative strategies accounted for 54.5% of participating endowments' assets, including 16.8% in private equity and 12.2% in venture capital ^[2]. Again, the figures are a record of practice, not a target.

Private-market interests of this kind are typically illiquid, often for many years, and capital can be lost. Fees, delayed distributions and valuation estimates that sit between transactions all affect what an investor ultimately receives. A substantial allocation is a design choice for a pool that can live with those features. It is not a promise of a particular result.

Resources and governance shape the size of the place

Within the same endowment study, the private-market weight rises sharply with size. Institutions with assets under US$50 million allocated 12.5% to alternatives, including 3.0% to private equity; institutions with assets over US$5 billion allocated 62.5% to alternatives, including 19.2% to private equity and 14.4% to venture capital ^[2][3][4]. The pattern is consistent with capacity: staffing, governance, the ability to underwrite and monitor managers, and the ability to sit with capital that cannot be freely withdrawn. It is not evidence of a universal right percentage.

That capacity is itself a form of work. Selecting managers, pacing commitments and reviewing holdings over a multi-year horizon are not tasks that sit naturally with a single public-market trade. They are closer to the way an owner or a board reviews a business.

Diversification is the reason often given

When limited partners are asked why they invest in private equity, diversification, not a stated return, is the reason Bain & Company reports as the main one, citing Preqin's June 2025 Investor Outlook Survey ^[5]. On that evidence, a place in a portfolio is a choice about horizon and about sources of risk, made by investors who can accept illiquidity and the possibility of loss. It is not a forecast, and past allocations are not an indication of future results.

The work behind the allocation

Building and governing a private-market allocation is a specialist discipline: reading managers, pacing capital, and, for an investor outside the United States, handling the legal, tax and currency layer that sits around any commitment. Crossing Borders into U.S. Private Markets takes up that cross-border layer, and In Private Markets, Manager Outcomes Diverge Widely takes up the importance of manager differences. The work calls for a specialist cross-border partner: one who reads a transaction as an owner would, who is at home in U.S. private markets, and who can work in the languages and legal cultures a Canadian or Asian investor actually lives with.