Nearly half of family offices (45 per cent) surveyed by alternative asset manager KKR said they are planning to increase their allocation to private credit.

In a survey of more than 75 chief investment officers who oversee over $3bn (£2.4bn) in assets on average, KKR found that family offices are switching from public equities and cash to private credit, infrastructure and private equity.

The survey found that 52 per cent of assets are allocated to alternatives on average, up 200 basis points from 2020.

Read more: KKR sees growth in credit in fourth quarter

“We hear the message ‘loud and clear’ that this segment of the market is changing – and for the better,” said Henry McVey, CIO of KKR’s balance sheet and head of global macro and asset allocation.

“These investors are diversifying across asset classes, and as they mature, they are getting better at harnessing the value of the illiquidity premium to compound capital. They are also using better hedging techniques and increasing both their desire and ability to lean into dislocations, strengths that we believe will position them to be at the winner’s table at the end of this cycle.”

The survey also found that many of  the family offices are adding expertise and hiring in areas of investment, risk management and product. In areas where they do not have in-house knowledge, they are looking to partner with asset managers.

“At a time when other allocators are pulling back from private allocations, this group’s intention is to actually increase exposure to private market investments again in 2024 to further take advantage of the illiquidity premium across a variety of alternative asset classes,” McVey added.

Read more: Family offices shun stocks for private markets and alternatives

Read more: KKR cautions on UK consumer finance risks