For much of the period following the Global Financial Crisis, family offices were able to allocate capital in conditions that were broadly supportive on a global scale. The integration of capital markets, expansion of global trade, and a prolonged period of declining real interest rates coalesced to create an environment where diversification across public assets brought structural advantages to portfolios.

At the same time, central bank balance sheets expanded materially using a variety of methods such as quantitative easing, while credit spreads tightened and equity markets recovered quickly from periods of stress. Correlations between traditional asset classes then became largely predictable. In that kind of environment, the family office’s main role was merely to take care of things, not fundamentally redesign them. Investors were inclined to spread risk across asset classes and allow time to do much of the work. This gospel for a generation of portfolios now fails to reflect the conditions that long-term family capital requires to thrive.

There are points where the outcomes for single-family and multi-family offices bifurcate – the former has family members, not clients, while the latter has client families – so in our analysis, we've used the term of "family capital" to capture the intentions of both. However, while the institutional structures themselves differ, many of the strategic considerations shaping the portfolio designs are shared.

This cyclical downturn didn't presage the structural changes that would come to shape the current investment landscape. The Annual Economic Report from the Bank for International Settlements reported that the conditions that led to very low rates are unlikely to return, and rising interest rates in 2022 exposed how sensitive both equity and fixed-income markets were to the reversal of liquidity. As geopolitical alignment has faltered and supply chains have become more regionalised, technological progress has accelerated both opportunity and challenges across numerous sectors.

The effect has been to undermine the core principles on which family capital portfolios are built. It has forced them to view the portfolio as a dynamic system that can deliver a wider range of outcomes for clients, instead of treating capital allocation as a business-as-usual exercise.

At Arbra, we see this evolution not as a break from effective wealth management, but as a continuation. Assembling portfolios that perform better than expected in average conditions is no longer what true capital growth is all about. There is a need to create purposeful frameworks that can endure through cycles and for successive generations of family capital to come. Mixing capital allocation with culture, and constructing this with significance and conviction, is what makes us stand out from a generic crowd.

Family offices are also changing their approach by focusing on the notion of capital stewardship, which manifests itself in the ways that portfolios are now constructed. The UBS Global Family Office Report 2025 noted that private markets represent one of the largest allocations within family office portfolios globally, with many respondents expecting to increase exposure to private equity and private debt in the coming years.

Investment structures used to be built by following a traditional 60/30/10 model, which performed well during the liquidity-driven expansion of the 2010s. However, rising rates and greater dispersion across asset classes exposed how dependent those models were on benign macro conditions. One explanation could be a search for higher returns, but the rationale may be slightly more nuanced.

Private assets offer more than the promise of an illiquidity premium. The additional expected return investors seek comes in exchange for committing capital for longer periods without the expectation of immediate liquidity. That reflects the ability to support strategic change and operational transformation over time, rather than illiquidity alone creating value. The premium exists because businesses undergoing strategic transformation, such as operational restructuring, infrastructure buildout, or expansion into new markets, require time and stable capital. Public markets price daily, whereas private capital operates over longer cycles.

For many families, private equity, infrastructure, and direct investments offer something more fundamental: agency. They allow groups to influence governance, align capital with long-term themes, and participate directly in shaping outcomes. Generational family capital, with time horizons measured in decades rather than quarters, finds this alignment particularly relevant.

Recent market cycles and turmoil have taught investors how important liquidity is. For the past decade, it has been seen by some as a cost that reduced returns, so family offices turned to illiquid assets for improved performance.

It's about more than mere safety nets, however – liquidity is a key component of a successful strategy. It helps businesses run, pays for charitable commitments, and provides options for investors. They value the ability to respond quickly when markets shift and new opportunities arise. Liquidity is not surplus; it's structural flexibility.

According to PwC Global Family Office Deals Study, family offices are actively engaging with environmental, social, and governance (ESG) issues when making decisions about their investment processes, showing a shift in generational priorities and an awareness of long-term risks.

When applied rigorously, ESG is less about screening and more about sharpening risk assessment. Governance quality, regulatory exposure, supply chain resilience, and reputational risk have demonstrated tangible financial consequences in recent years.

Regulatory exposure has also become more visible. Energy transition policies, carbon pricing mechanisms, and evolving disclosure requirements have materially repriced certain sectors over the past five years, reinforcing that policy risk is not theoretical but an investable risk.

Over long periods, such factors compound, influencing not just performance but also durability.

As portfolios become more intricate, a key factor in high-quality, long-term results comes back to governance. Research from Campden Wealth shows that robust governance is a key feature of long-lasting family offices, especially during periods of generational transition.

Clarity and transparency around rules, decision-making rights, and escalation processes can make these transitions more seamless and allow families to act decisively while preventing reactive decisions when markets are under stress.

The redefinition of capital allocation within family capital structures also reflects a deeper shift in how wealth itself is perceived. Today, it can't be amassed anonymously or without care; it needs to be carefully planned in alignment with the values that move in tandem with the client.

The focus for family capital offices remains on maintaining performance, control, resilience, and purpose over time to ensure a sound balance of returns. While certainty cannot be promised, the clarity of structure, discipline of governance, and intentionality of design can. At Arbra, we have seen that when capital is structured with intent, it is more than a collection of assets – it becomes a steadfast foundation on which family capital can grow and that clients can rely on.