The FAST Take

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Endowments & Family Office Allocations

09/12/2023

Private markets have historically been more accessible to institutional and ultra-high net worth portfolios, with many of those investors having spent decades building familiarity, knowledge and infrastructure for investing in these asset classes. In particular, we highlight two investor types which, on average, hold large allocations to the private markets.

Family offices for the ultra-wealthy average 40% allocations to private markets, with the majority of their real assets exposure coming from private markets. Private credit is the smallest but quickest growing allocation among such investors.

Family Offices1
Family offices donut chart


Large ($1B+) endowments average 46% allocations to private markets, with the majority of their real assets exposure and nearly half their equity exposure coming from private markets. Private credit is the smallest but quickest growing allocation here as well.

$1bn+ Endowments2
Endowments donut chart


It is also interesting to look at different-sized endowments regarding their private market investing behavior. Smaller endowments, historically with more limited access and fewer resources to pursue private market investing, tend to have smaller allocations. Interestingly, there is almost a linear relationship between size of the endowment, total allocation to private markets, and annualized returns.

10yr Returns for Endowments Categorized by AUM3
Scatterplot showing Private Market Allocation and Annualized Return for Endowments

With private markets becoming increasingly accessible through different structures, including lower minimums, shorter lockups and greater liquidity, we believe that individual investors can benefit from having similar private markets allocations to family office and endowments, upwards of 50% of a portfolio depending on their financial objectives.

The Financial Advisor Solutions Team

Ares Wealth Management Solutions

Carlin Calcaterra

Managing Director, Financial Advisor Solutions Team

Brendan McCurdy

Managing Director, Financial Advisor Solutions Team

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AccessAres is your resource for education and information about the private markets. Talk to us to learn more about these important asset classes.

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AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.

You are now entering the AccessAres website

AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.

You are now leaving the AccessAres website

AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.