How the World's Wealthiest Are Rewriting Asset Allocation
The traditional blueprint for investment strategies—the classic 60% stocks, 40% bonds portfolio—is being rapidly redrawn by the world's most sophisticated investors. Faced with persistent inflation, geopolitical conflict, and structural uncertainty, global ultra-high net worth families and institutional investors are increasingly turning away from conventional public markets to allocate substantial capital to alternative investments. These long-duration, real-asset classes are now a core pillar of global wealth preservation.
Data from global financial institutions highlights a significant trend in 2025: private capital is aggressively seeking out illiquidity premiums and inflation protection in tangible, hard assets. While public equities remain a major allocation (averaging around 31% globally), the total allocation to alternatives—including private equity, private real estate, and private credit—often exceeds 40% in many sophisticated global portfolios.
The New Global Diversification Playbook
The wealthy are strategically increasing their exposure to assets that exhibit a low correlation with public markets, using them as a shield against volatility.
1. Real Assets and Thematic Infrastructure
The demand for physical, income-producing assets is soaring worldwide. This is driven by the conviction that long-term, secular themes offer more reliable returns than short-term market fluctuations.
Infrastructure: Private infrastructure and private real estate are seeing the biggest planned increases in allocations. The Artificial Intelligence (AI) boom has created an unprecedented energy bottleneck, driving massive demand for investment in new power generation and digital infrastructure, such as data centres. This is a structural opportunity that transcends regional economic cycles.
Real Estate: While traditional commercial real estate faced headwinds, global investors are focused on niche, high-growth sectors. This includes logistics, specialised industrial properties, and, critically, digital infrastructure. For instance, 65% of global institutional investors planning to increase real estate exposure are targeting digital infrastructure, reflecting the relentless global expansion of cloud computing and AI-driven data processing.
Forestry and Farmland: These agricultural assets remain highly attractive as a hedge against inflation and a play on non-correlated returns. Their value is underpinned by biological growth (in the case of timber) and the fundamental, non-negotiable global need for food and materials.
2. The Rise of Private Credit
Another major shift is the structural increase in private credit (non-bank lending). Amid normalising interest rates, traditional banks have pulled back from riskier lending. Private credit funds are filling this gap, offering higher yields and bespoke financing solutions. Global family offices have demonstrably increased their allocations to private credit, favouring its ability to provide steady, higher-income streams—a critical component of modern portfolio income generation.
Tech Adoption and the Generational Divide
While anchoring portfolios in hard assets, global investors are simultaneously embracing the most disruptive technological trends.
AI as an Investment Theme: Technology remains the most overweight sector globally. Investors are directly funding companies developing Generative AI, as well as indirectly funding secondary beneficiaries, such as energy and industrial firms providing the massive infrastructure needed to support the AI ecosystem.
AI as a Process Tool: Sophisticated global wealth managers are integrating AI into their internal processes, using it for data analysis, due diligence, idea generation, and optimising portfolio exposures across multiple jurisdictions.
Digital Assets: While two-thirds of family offices globally are not yet invested in cryptocurrencies, interest continues to trend higher. In the Asia-Pacific (APAC) region, in particular, a substantial portion of investors are exploring digital assets as an unconventional tail-risk hedge alongside traditional gold and core fixed-income positions, indicating a clear generational shift in acceptable asset classes.
Key Takeaways for Global Retirement Planning
For any long-term investor, whether based in London, Singapore, or New York, the trends among the world's wealthiest offer clear lessons:
Focus on the Core 40%: Do not overlook the role of alternatives. True diversification requires moving beyond publicly traded stocks and bonds and allocating a meaningful portion of capital (often 30% to 50%) to real assets like infrastructure, private real estate, and private credit.
Embrace Thematic Investing: Seek out investments aligned with undeniable long-term secular trends, such as the growth of AI, the demand for sustainable energy, and the scarcity of high-quality farmland.
Prioritise Illiquidity for Returns: The world's wealthiest are willing to tolerate illiquidity in exchange for superior return potential. For those with a long time horizon, this means exploring private market funds that offer access to these high-conviction assets.
The global investment landscape in 2025 is defined by a flight to quality and stability, delivered through tangible assets that protect capital from the pressures of a complex, interconnected world.
Disclaimer: The content provided herein is for general informational purposes only and does not constitute financial or investment advice. It is not a substitute for professional consultation. Investing involves risk, and past performance is not indicative of future results. We strongly encourage you to consult with qualified experts tailored to your specific circumstances. By engaging with this material, you acknowledge and agree to these terms.