Middle Eastern family offices are increasingly allocating wealth to hedge funds, private credit, and digital assets, as the region’s next generation of heirs prepares to inherit an estimated $1tn, according to a report by Bloomberg.
Younger principals, such as Abdulaziz and Abdulla Kanoo, are driving this shift, bringing experience in venture capital and digital assets to family offices that historically focused on real estate and direct business holdings. Their family office continues to back crypto investments via hedge funds, while the twins have also launched a digital asset services firm serving other family offices.
Globally, banks including Citigroup, Barclays, and Deutsche Bank are expanding their Gulf operations to tap into this growing appetite for alternatives. Hedge funds are particularly benefiting from the proximity, with Dubai hosting over 70 funds and Abu Dhabi home to global managers such as Brevan Howard and Marshall Wace.
According to family office advisors, while real estate holdings are still prominent in portfolios, allocations to riskier asset classes are steadily rising. Demand is growing for hedge fund strategies with digital asset exposure, tokenised investment products, and private credit co-investments. Next-generation family office leaders are also experimenting with securities lending programs to enhance returns.
Recent surveys show over 70% of Gulf single-family offices co-invest in private equity, while nearly 60% are active in venture capital. Regional families are also increasingly investing in Asia, complementing traditional US and European allocations.
