Executive TL;DR
|
Ask whether family offices are adopting tokenized alternative investments and the honest answer depends entirely on which survey you read and which question it asked. UBS finds family offices allocating more to alternatives than at any point on record. JPMorgan finds the overwhelming majority holding essentially no digital asset exposure at all. BNY finds a sharp year-on-year jump in family offices exploring crypto. None of these findings are wrong they are measuring different things, at different thresholds, across different populations of family offices, and understanding why they diverge is more useful to an institutional reader than picking whichever number best supports a pre-existing narrative.
The Alternatives Allocation Is Real and Growing
UBS’s 2026 Global Family Office Report, surveying 307 family offices with an average net worth of $2.7 billion and average assets under management of $1.3 billion, found 42% of the average portfolio sitting in alternative investments, with 29% specifically in private markets private equity, venture capital and private credit combined. That scale of alternatives exposure is not a rounding error; it represents nearly half the portfolio of some of the world’s wealthiest families sitting outside public stocks and bonds, and it has grown from a much smaller base a decade ago.
The composition inside that alternatives sleeve is shifting, which matters for where tokenization is likely to find its first family office adoption. UBS data shows family office private equity allocations falling from 22% of portfolios in 2023 to 21% in 2024, with a further decline to a planned 17% in the 2026 cycle a five-percentage-point retreat over three years from what was long the flagship alternative asset class for this investor class. Private credit, hedge funds, real estate and secondaries are absorbing the difference, driven by a combination of stretched public equity valuations, credit market jitters following the First Brands bankruptcy in late 2025, and a roughly $83 trillion generational wealth transfer UBS estimates is now moving from older family patriarchs and matriarchs to heirs.
Crypto Exposure Tells a Different Story Than ‘Alternatives’ Does
JPMorgan’s 2026 Global Family Office Report, surveying 333 family offices averaging $1.6 billion in net worth, found 89% of respondents hold no cryptocurrency exposure at all, with digital assets accounting for just 0.4% of portfolios on average. Private equity still leads planned allocation increases globally, with 37% of family offices intending to commit more capital to buyouts and related strategies, while AI-linked investments, healthcare innovation and infrastructure are drawing growing interest as long-term growth themes ahead of digital assets specifically.
This sits in apparent tension with a BNY Mellon study finding that 74% of ultra-high-net-worth family offices are now investing in or actively exploring cryptocurrencies up 21 percentage points from the prior year. The tension resolves once the methodology is examined: ‘investing in or exploring’ is a far lower bar than holding a meaningful, governance-relevant portfolio allocation, and BNY’s survey population of ultra-high-net-worth offices is not identical to JPMorgan’s broader family office sample. Both findings can be true simultaneously a growing share of family offices are conducting due diligence, running small pilot allocations, or actively researching the space, while the actual capital committed remains, for the large majority, negligible relative to total assets under management.
Tokenization Interest Runs Ahead of Crypto Interest
The more revealing distinction for institutional readers is between cryptocurrency exposure and interest in tokenization of traditional alternative asset structures a meaningfully different proposition. Industry surveys of institutional investors more broadly have found more than half expressing interest in tokenized assets generally, with 61% specifically interested in tokenizing alternative fund structures: private equity, private credit and real estate. This is precisely the asset mix family offices already hold at scale through their existing 29% private markets allocation meaning the relevant question for a family office is less ‘should we buy crypto’ and more ‘would we accept a tokenized wrapper around a private equity or private credit fund commitment we would make anyway.’
Real infrastructure already exists to test that question. Tokenized vehicles for funds managed by Apollo, KKR, Hamilton Lane and others accessible to accredited and qualified purchasers through platforms with the necessary transfer agent, broker-dealer and custody infrastructure represent the practical entry point for family offices evaluating tokenization, since the underlying investment thesis and manager due diligence is unchanged; only the wrapper and settlement mechanism differ.
The Barriers Are Specific, Not Vague
Where family offices and their advisers express caution, the concerns are concrete rather than generic scepticism. Custody is a recurring and specific friction point: adding a tokenized position often means an institution now needs both traditional custody and separate crypto-native custody, frequently from different providers with different risk profiles and reconciliation processes the opposite of the operational simplification tokenization is meant to deliver. A second, more structural concern is that tokenization cannot manufacture liquidity for an asset that is inherently illiquid; wrapping a private equity fund interest or a piece of real estate in a token does not, by itself, create a functioning secondary market for it, and whitelisting requirements on compliant tokenized instruments further restrict who can hold and trade them.
Regulatory clarity, long cited as the primary obstacle to institutional tokenization more broadly, has been genuinely improving rather than merely promised: the GENIUS Act’s passage in 2025 and an anticipated Clarity Act in 2026 are cited by multiple industry analyses as removing meaningful uncertainty that had previously discouraged conservative allocators family offices among them from engaging with the space at all.
Where Family Office Interest and Tokenization’s Current Strengths Actually Overlap
Tokenization’s most developed use cases today concentrate in private credit and tokenized Treasuries asset classes where existing regulatory frameworks, established institutional demand for yield, and genuine capital-efficiency gains from using yield-bearing tokenized assets as collateral already align. This overlaps directly with where family office alternatives allocations are already moving: away from traditional private equity buyouts and toward private credit and secondaries. Infrastructure is a second area of alignment UBS’s 2025 research found only 1% of current family office allocations sit in infrastructure today, but more than 25% of family offices plan to expand that exposure within five years, and a 2025 BlackRock survey separately found 30% of family offices intend to increase infrastructure holdings in 2026 specifically. Tokenized infrastructure and private credit vehicles offering 6-9% annualised yield are being positioned directly into that expansion window, rather than competing with it.
Real estate remains the asset class most often cited in tokenization discussions involving family offices specifically, given how much of a typical family office balance sheet sits in illiquid property but it is also the asset class where the liquidity-creation limitation is most acute, since fractionalising ownership of a building does not, on its own, produce buyers for those fractions absent a functioning secondary market and a regulatory framework supporting one.
Frequently Asked Questions
1. What percentage of family office portfolios are in alternative investments?
42% on average, according to UBS’s 2026 Global Family Office Report, which surveyed 307 family offices with an average net worth of $2.7 billion. Within that, 29% sits specifically in private markets private equity, venture capital and private credit.
2. Do most family offices hold cryptocurrency?
According to JPMorgan’s 2026 Global Family Office Report, no 89% of the 333 family offices surveyed hold no crypto exposure, with digital assets averaging just 0.4% of portfolios. A separate BNY Mellon study of ultra-high-net-worth offices found a higher figure (74% investing in or exploring crypto), reflecting a lower bar for ‘exploring’ and a narrower survey population.
3. Is family office interest in tokenization the same as interest in cryptocurrency?
No, and this is the key distinction. Interest in tokenizing existing alternative asset structures private equity, private credit and real estate funds family offices already invest in tests significantly higher in industry surveys than actual cryptocurrency portfolio exposure, since it concerns the wrapper and settlement mechanism for familiar assets rather than a new asset class.
4. What is the biggest barrier to family offices adopting tokenized alternatives?
Two structural issues recur most: custody fragmentation, since tokenized positions often require separate crypto-native custody alongside existing traditional custody arrangements, and the fact that tokenization does not create liquidity for an inherently illiquid asset on its own whitelisting and transfer restrictions on compliant tokens further limit secondary trading.
5. Where is tokenization most likely to gain family office adoption first?
Private credit and infrastructure appear best aligned with current family office allocation trends both are categories family offices are already increasing exposure to (as private equity allocations fall from 22% in 2023 to a planned 17% in 2026), and both have more developed tokenization use cases than real estate or public equities currently do.
Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. Readers should conduct their own research and consult with qualified professionals before making any investment or business decisions.