Family offices rattled by market swings and tariffs

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. While family offices pride themselves on investing for the long term, this week’s tariff volatility and confusion around government policy is causing many to slow their deal-making, according to experts. The S & P 500 was down 1.3% on Thursday alone, and all three major averages were down roughly 3% so far this week on the implementation of tariffs on Mexico, Canada and China. Family offices and their advisors say they’re not overly concerned with this week’s market moves. None were selling stocks in response, nor were many buying on lower prices. Instead, many are hitting the pause button on major investments or private deals until they have more clarity on major policy direction. “Most families are hanging back and not making any big bets, staying diversified and maintaining liquidity, until they see how things play out,” said Michael Zeuner, managing partner of WE Family Offices. One family office CIO said they were doing due diligence on a private company that had business in Mexico, “and we just decided to hold off until we know what the policy is going to be.” While tariffs shocked the markets, high-net-worth investors can afford to weather the storm both in terms of cost of living and swings in their portfolio. Ultra-wealthy investors have been preparing for the event of tariffs since the election but haven’t made dramatic changes to their portfolios, according to Charlie Garcia, founder of R360, the investment community for centimillionaires. “Because they’re centimillionaires, the focus is on decades, not quarters,” Garcia said in an email to CNBC. “Nonetheless, we are making modest changes — not a wholesale pivot, but a recalibration.” For instance, Garcia said, some members have increased their allocation to U.S. producers of steel and aluminum via private equity or diversified materials funds. Deepak Puri, Americas chief investment officer of Deutsche Bank’s private banking arm, told CNBC that the bank’s queries range from concerns that a bear market is on the horizon, which Deutsche Bank does not anticipate, to questions about safe-haven trades like bonds and gold. UBS senior portfolio manager Jason Katz said that while most clients are fairly calm about tariffs, he’s noticed a difference along party lines. “One’s politics definitely play in to the queries we’re receiving,” the private wealth advisor said. This uncertainty is harder for some ultra-rich clients to tolerate than others, said Elliot Dornbusch, founder and CEO of CV Advisors. The Miami-based firm with $13 billion in assets has many clients with businesses in Latin America that are squarely impacted by tariffs. “I think on the portfolio construction side, we’re fine, and our clients are not really concerned about that,” he said. “They are really more concerned about the future. What is coming? We don’t know. I mean, we’re gonna have to take it day by day.”

In an aerial view, shipping containers are organized at the Houston Port of Authority on February 10, 2025 in Houston, Texas.

Brandon Bell | Getty Images

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.

While family offices pride themselves on investing for the long term, this week’s tariff volatility and confusion around government policy is causing many to slow their deal-making, according to experts.