Cambridge Associates (CA) is advising Asian family offices to increase their exposure to hedge funds and other alternative investments as a buffer against mounting market turbulence tied to US tariff policies and macroeconomic uncertainty, according to a report by CityWire.
Ming Yan, a Managing Director at CA in Singapore, says that recent selloffs sparked by renewed Trump-era trade tensions are prompting a growing number of family offices to reconsider their approach to diversification – particularly when it comes to hedge funds.
“We’ve been talking to clients about a strong opportunity around hedge funds,” said Yan, noting that many families had de-prioritised hedge fund allocations during the past few years of equity market exuberance. “Now, amid volatility, they’re revisiting that decision.”
Cambridge, which advises more than 280 family offices globally – 28% of its private client base – has been actively encouraging clients to use market pullbacks as a chance to rebalance portfolios and broaden their exposure to alternatives. Hedge funds, with their ability to generate alpha and hedge against downside risk, are central to that strategy.
Family offices in Asia – many of them younger and less entrenched in alternatives compared to their Western counterparts – are now facing their first major test in navigating persistent market swings. According to Yan, Singapore alone saw its number of single-family offices surge to over 2,000 by the end of 2024, with nearly half of those established since the beginning of 2023.
“For many of these newer family offices, this is the first time they’re experiencing real volatility in both their investment portfolios and operating businesses,” she said. “Hedge funds offer an attractive way to introduce risk mitigation and diversify returns in an unpredictable macro environment.”
While some regional family offices have been using recent dislocations to bargain hunt in beaten-down Chinese equities and explore Hong Kong real estate opportunities, Yan is steering conversations toward a broader strategic rethink. That includes building allocations to private markets and hedge fund strategies that can weather both equity downturns and macro shocks.
Despite the uncertainty, Cambridge is urging clients to avoid reactive portfolio changes. “We want to keep clients from chasing what’s hot or panicking in the face of short-term noise,” said Yan. “Instead, we focus on making measured, long-term decisions—of which hedge fund diversification is increasingly one.”
