A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox. At his Singapore-based family office, Srihari Kumar has long favored U.S. investments. The former Goldman Sachs managing director, who also co-founded TPG-Axon Capital, takes a truly global view of investing. The portfolio at his family office, LionRock Capital, has traditionally been about 40% in the U.S., 40% in India and 20% in the rest of the world. In the past six months, however, that has shifted. LionRock’s investments in the rest of the world (outside the U.S. and India) have expanded to over 25%, largely at the expense of the U.S. And it may shift more in the future, Kumar said. “The combination of tariffs and reduction in government-related spending (through DOGE and research spending etc.) causes greater economic uncertainty and a greater risk that economic growth will falter without a corresponding reduction in interest rates,” Kumar said. He stressed that he’s still bullish on the U.S. over the long term, especially when it comes to artificial intelligence and technology. But he said that given high U.S. stock valuations, the market concentration in the Mag 7 stocks and new opportunities abroad, he is “taking a pause” on adding to the U.S. LionRock is not alone. Even before President Donald Trump ‘s bombshell tariff announcement Wednesday afternoon, family offices are rethinking their investments in the U.S. Policy uncertainty, volatile stocks and declining outlooks for economic growth have driven many family offices to seek safety and geographic hedges. Some are putting money into hard assets, like gold or real estate. Others are raising cash and waiting for the dust to settle. After years of favoring U.S. “exceptionalism,” experts said family offices are now rethinking their global allocations, lowering their U.S. exposure and looking to take advantage of new opportunities overseas. Whether it’s investing in Europe on the strength of renewed defense spending, or betting on China’s advancements in AI and robotics, family offices are at the forefront of a rapid shift to more global diversification. According to the UBS Global Family Office Report, family offices had half of their assets invested in North America in 2024. Europe ranked a distant second, with 27% of assets, followed by Asia-Pacific and China. North American family offices were the least diversified, with 82% of their assets invested in North America. Yet even overseas family offices put a lot of money in the U.S., with family offices in Asia and the Middle East investing 49% of their assets in North America. The big question in the financial industry is whether the family office move out of the U.S. will be brief and limited, or whether it’s the start of a broader structural trend. The world’s 8,000 single family offices have over $3 trillion in assets under management, expected to grow to $5 trillion by 2030, according to Deloitte Private. Family offices have become a critical source of capital for startups, private equity, venture capital, real estate and other businesses in the U.S. If family offices start moving more capital abroad and divest from the country, the drop in funding could be felt across the financial system. For now, the moves are relatively small. Family offices invest for the long term, with time horizons of 20 or even 100 years, so they don’t make big changes based on headlines and market swings. “We’re not seeing a wholesale shift out of the U.S.,” said Richard Weintraub, the family office group head of the Americas at Citi Private Bank. “But they’re kind of rediscovering opportunities in Europe and Asia. I think it’s probably more tactical in nature. For this to be a continued strategic shift, you’d have to see the fundamentals back it up over a longer period.” Non-U.S. investors seem to be making the biggest moves. Between Feb. 14 and March 14, European investors pulled over $3.079 billion from U.S. equity ETFs and added nearly $16 billion to European equity ETFs, according to Morningstar Data. Kumar said the repatriation of capital from the U.S. by foreign investors “could cause an increase in the cost of capital for U.S. markets, with higher rates and lower valuation multiples.” That could also lead to higher debt payment costs and deficits, which are also a concern for foreign investors. William Sinclair, head of the financial institutions group and the U.S. family office practice at J.P. Morgan Private Bank, said strong returns in Europe and other global stock markets in 2025 have only highlighted the need for family offices to be truly diversified across countries. “Due to elevated policy uncertainty, there is a growing emphasis on diversification as a defense against market volatility,” he said. “This includes a shift to non-U.S. stocks, core fixed income, and gold, all of which have delivered solid returns and helped shield diversified portfolios.” He added that, “Overall, we have seen a modest shift in capital allocation outside the U.S. by Single-Family Offices, primarily as a strategy for broader diversification.”
A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
At his Singapore-based family office, Srihari Kumar has long favored U.S. investments.