The growing focus on private equity among family offices is driven by their longer-term outlook and the flexibility of deal-by-deal investing, offering higher potential returns and greater control. This approach is increasingly appealing amid global economic instability, high interest rates, and lingering pandemic effects, as traditional investments often underperform in such conditions. 

Private equity can cushion portfolios against market volatility, consistently outperforming listed equities over the past two decades. Family offices pursuing a deal-by-deal strategy face challenges like high minimum investment requirements and the need for specialized expertise. 

Embracing alternative investments enables family offices to seek superior returns, greater diversification, and enhanced risk management while contributing to innovation and economic dynamism.

Finsum: If the hedge is the clear concern, maybe investors should lean into alternatives, but look at historical correlations.