For families who have built enduring wealth, the challenge is no longer accumulation. It is intention.
That framing, offered in the foreword by Mary Callahan Erdoes, sets the tone for Principal Discussions1—a rare, anonymized distillation of 111 confidential, hour-long conversations with billionaire principals across 28 countries, representing more than $500 billion in collective net worth. The report does not read like a survey. It reads like a long conversation among owners—people for whom capital, control, legacy, and consequence are inseparable.
What emerges is a portrait of families shifting decisively away from passive stewardship toward active ownership, institutional discipline, and purpose-driven continuity across generations.
From Capital Providers to Capital Architects
One theme dominates the entire report: wealthy families no longer want to just allocate capital—they want to shape outcomes.
Nearly 70% of principals now prefer active roles in their private investments—through governance, operational oversight, or board participation—up sharply from 43% just three years ago. As one principal puts it:
“I like to think we are geniuses with great foresight, but the investment decision-making process is a combination of structure, analysis and having a feel for where things are going. A lot of that comes from relationships, conversations and experience.”
This is not opportunism. It is continuity. Seventy-three percent still operate their original family business, and most continue to invest where they have earned their expertise. The result is a capital base that behaves less like an allocator and more like a permanent owner—patient, concentrated, and opinionated.
Institutionalizing the Family Balance Sheet
As portfolios scale, informality gives way to structure.
By a three-to-one margin, principals report implementing formal investment processes, including investment committees, CIOs, and written policies. Seventy-seven percent now report having a formal investment process. Yet control remains personal:
“I make them entirely and have a desire to have control over that.”
Others describe consensus models:
“It’s consensus based. We set a list of conditions for each investment and go through these checks for the proposals.”
And still others selectively delegate:
“It’s conservatively invested, and I focus my time and investment dollars on things I like doing.”
The common thread is intentional governance—not bureaucracy for its own sake, but repeatability, clarity, and alignment with family objectives.
Private Markets: Doubling Down, Not Dialing Back
The most decisive shift in the report is toward private investments.
Allocations to private assets more than doubled year-over-year in 2025, with twice as many families increasing exposure as reducing it. The motivation is structural, not cyclical. As the universe of public companies contracts and private markets expand, families see opportunity where liquidity is optional.
“One of our biggest advantages is that we can own things for as long as we want.”
This long-duration mindset allows families to pursue both strategic investments—often adjacent to their operating businesses—and opportunistic investments driven by conviction or passion. Due diligence, however, is relentless:
“It’s so much work. One of our secrets is being super focused when assessing an investment.”
Ownership Mindset: Control, Concentration, and Conviction
Where families invest privately, they want influence.
Nearly 70% prefer active control roles, and many explicitly favor majority ownership:
“My personal preference is to be a majority owner of private businesses and a minority owner of public ones.”
Others acknowledge different approaches but the same intent:
“We are not a majority investor… but very active in the operations especially at the board levels.”
The divergence is tactical, not philosophical. The shared belief is that capital without voice is incomplete capital.
Specialty Assets: When Passion Becomes Strategy
Luxury assets are common—but most principals are clear-eyed about their role.
“Yachts and planes are not investments.”
Art and collectibles are typically treated as personal assets, not portfolio drivers. Sports teams are the exception.
Ownership of sports franchises has surged—20% now own controlling stakes, up from 6% in 2022. Principals increasingly describe sports ownership as both financially compelling and emotionally unifying:
“Sports have gone from being a wealthy individual’s hobby to a really serious business.”
For many families, teams become generational anchors—shared experiences, shared governance, shared identity.
“This is a business pleasure, and something we really want to do, a generational asset, where we will make a lot of money over time.”
Geopolitics, Not Valuations, as the Dominant Risk
Asked about the most significant risks facing the world, 56% of principals cite geopolitics as the top concern—above inflation, rates, or valuations.
“Over the past decade, there has been a lot of political whiplash. It speaks to the importance of diversification and not putting all your eggs in one basket.”
The response is pragmatic: global diversification, institutional advice, and operational resilience—not reactive trading.
AI: From Curiosity to Capability
Artificial intelligence has moved decisively from theory to practice.
Nearly 80% of principals use AI personally, and 69% use it in their businesses. Use cases range from research and planning to legal analysis and strategy. Still, views diverge:
“Technology has changed the world, and AI is the new shift.”
Others raise concerns about pace, ethics, and human connection. What is universal is the conclusion:
Understanding AI is no longer optional.
Governance: Wealth Follows the Family, Not the Other Way Around
Perhaps the most revealing insight in the report has little to do with markets.
Family governance—how families communicate, decide, and resolve conflict—is treated as a core asset.
“Money does not drive the family. The family drives the family.”
As families expand across branches and generations, governance structures evolve—from informal traditions to councils, boards, constitutions, and charters. The goal is unity, not control:
“If the goal is unity, you make sacrifices.”
Communication is both structured and personal. Half of families use a blend of formal and informal approaches. Many document family history, values, and stories—sometimes through books, podcasts, or even AI-generated recordings—to preserve continuity.
Preparing the Rising Generation: Stewardship Over Entitlement
Across the report, principals return to one concern: preparing heirs without diminishing agency.
“The purpose of the wealth is to complement your life, not to solve your life.”
Approaches vary—some emphasize complete freedom, others require outside experience before joining the family enterprise—but the philosophy is consistent:
“The worst thing we could do as parents is make all this money, give them the money and not give them the skills to manage it.”
Transparency increases with generational distance, but stewardship remains the governing principle:
“We are stewards like our parents, who were stewards before us. No one has entitlement over the wealth.”
Philanthropy: From Giving Away to Living Through
Philanthropy in this cohort is rarely passive.
Most principals view giving as an extension of identity, business judgment, and family engagement:
“When I think about my legacy, I think about giving back.”
Many prefer direct involvement, seed capital, and long-term engagement over one-time donations. Philanthropy becomes a training ground for younger generations and a unifying force for the family.
“I’m deeply motivated by the question of how we pay forward the many benefits we’ve received in life.”
What This Means for Advisors and Investors
Key Takeaways
- Ultra-wealthy families are acting like institutions—but with longer time horizons and fewer constraints.
- Private markets, control, and governance matter more than liquidity.
- Family governance is treated as an investable asset, not a soft skill.
- AI literacy is becoming a baseline expectation for owners, not just operators.
- Purpose—expressed through business, philanthropy, and family engagement—is now central to capital strategy.
The message of Principal Discussions is not that wealthy families are chasing returns.
It is that they are designing systems—financial, familial, and philosophical—that allow capital to endure, adapt, and mean something long after the balance sheet is complete.
Footnote:
1 J.P. Morgan Private Bank. “Principal Discussions: Conversations with the World’s Wealthiest Families.” J.P. Morgan Private Bank, 2025.
