Vasyl Matiy Analysis: Why Family Offices Are Cutting Private Equity for AI Investments

Leading wealth management expert reveals exclusive insights from UBS Global Family Office Report 2025

By Vasyl Matiy, CEO and Co-founder of Smart Family Office, Senior Venture Partner at Toloka.vc

Ultra-high-net-worth families managing an average of €1.02 billion each are shifting investment strategies significantly in 2025, prioritising defensive positioning amid global trade war concerns, according to the latest UBS Global Family Office Report 2025 analysed by leading wealth management expert Vasyl Matiy.

Key Investment Allocation Changes for 2025

The comprehensive study of 317 single family offices with average net worth of €2.5 billion reveals dramatic shifts in billionaire investment behaviour compared to previous years:

Equity Markets Lead Portfolio Allocation

• 30% allocated to equity markets (26% developed markets, 4% emerging markets)
• Planned increase to 29% in developed market equities next year
• Healthcare and electrification identified as primary technology investment focuses
• 35% of family offices have clear healthcare investment strategies
• 29% have defined electrification investment plans

Fixed Income Gains Favour as Yields Improve

• 18% in bonds (15% developed markets, growth projected to 17%)
• Higher yields finally compensating for investment risks
• Quality over quantity approach replacing aggressive growth strategies

Private Equity Allocation Decreases Ahead of Exit Season

• 21% in private equity (11% direct investments, 10% through funds)
• Reduction from 22% peak in 2023 to anticipated 18%
• “Dry powder” strategy maintained for attractive opportunities

Private Debt Doubles Year-on-Year

• 4% allocation to private debt – 100% increase from previous year
• Continued growth trajectory expected in this sector

Global Trade War Tops Investment Risk Rankings

Family offices identify global trade war as the primary investment threat for 2025, followed by major geopolitical conflicts and inflation concerns. This defensive mindset drives strategic portfolio rebalancing.

Technology Investment Priorities

Artificial Intelligence Becomes Strategic Focus

• 27% maintain separate AI allocations
• 64% actively developing AI investment strategies
• 75% believe banks and financial services will benefit most from generative AI
• 69% plan AI implementation for reporting and portfolio analytics within five years

Emerging Technology Interests Include:

• Blockchain and decentralised finance
• 6G technologies
• Quantum computing
• Agricultural and sustainable lifestyle innovations

Regional Investment Trends

North American Focus: American family offices increased real estate allocations from 10% (2023) to 18% (2024), whilst Latin American and Southeast Asian families reduced property exposure.

European Positioning: Western European markets remain attractive for liquid growth opportunities and yield generation in volatile environments.

Sustainability and Impact Investing

• 37% invest in clean technology sectors
• 49% include health technology innovations
• 44% pursue education investments through philanthropy
• 27% focus on strategic philanthropy addressing root causes rather than immediate relief

Common Investment Mistakes to Avoid

According to Matiy’s analysis, novice investors typically make critical errors including:

• Overconcentration in public markets (60-80% allocation leading to insufficient diversification)
• Trend-chasing behaviour rather than advance positioning
• Emotional decision-making and short-term focus

Portfolio Protection Strategies

Family offices employ sophisticated hedging approaches:

• 40% increase active management reliance
• 31% utilise hedge fund strategies
• 27% increase illiquid asset holdings
• 26% employ high-quality, short-duration fixed income