Lombard Odier: Family Offices Slash Return Expectations
Single family offices were less optimistic in 2025 about the long-term returns of all asset classes except one. A report by Lombard Odier explores their investment outlook in an increasingly uncertain macro environment.
The average 10-year annual return expectations from single family offices (SFO) in 2025 decreased across the board compared to 2024 (see image below), according to a Lombard Odier report entitled «rethink family wealth».
High-yield bonds saw the biggest drop from 7.6 percent to 5.8 percent. The report notes that responses were collected in November 2024 with US equity return expectations since rising from 7 percent to 7.2 percent, though still below 7.8 percent in 2024. Gold was the sole asset class that saw a year-on-year improvement with return expectations increasing from 4 percent to 4.5 percent.
Asset Allocation Strategies
In terms of asset allocation (see image below), SFOs tend to have greater exposure to cash compared to any other type of institutional investor at an average of 9 percent. They also rank second behind endowments in terms of allocations to alternatives at 29 percent.
«When it comes to asset allocations, there are as many as there are [...] SFOs. Smaller SFO asset allocations resemble our own ‘balanced’ asset allocation solutions. The asset allocations of larger SFOs may be much closer to those of big US endowments,» said Michael Strobaek, global chief investment officer at Lombard Odier.
