Stewardship in a fragmented world: geopolitical implications for family offices

From financial crises to conflicts and market shocks, volatility has been a recurring feature of the recent past. But today’s geopolitical tensions have had an unprecedented impact on investment decision-making as uncertainty reigns. Family offices have historically been well-placed to remain patient and ride out short-term volatility, but even they are contending with the complexity of an increasingly fragmented world. We explore how these stewards of long-term capital are responding to the new status quo.

Over the past three decades, the world’s billionaire population has continued to grow despite repeated periods of disruption – from financial crises and geopolitical realignments to rapid technological change, pandemics, war, and climate-related shocks. Against this backdrop, supply chains expanded, and cross-border investment flowed, resting on a broad assumption of continuing economic integration. Today, that assumption is under pressure.

While volatility has long been a feature of markets, the present geopolitical landscape is reshaping how investment decisions are made. Even family offices, typically able to take a long-term view, are dealing with this added layer of complexity to managing their wealth.

“We have talked over the years about ‘tectonic shifts’. Well, we are well and truly in a time of tectonic shifts in trade, geopolitics, voter preferences, supply chains, energy security and inter-generational transition,” says Salman Mahdi, Deutsche Bank Private Bank’s Global Vice Chairman.

“In recent conversations, many family offices have spoken about responding to the current environment by trimming or readjusting portfolio risk – particularly in certain areas of public equity markets – as they look to reallocate towards longer-term, less liquid investments,” he comments. 

Globalisation, disrupted: how family offices are reframing risk through a geopolitical lens

Today’s geopolitical tensions reflect a broader shift away from global integration towards strategic decentralisation. Although the US has long been the dominant force on the international stage, that position is being challenged by other powers seeking a more heterogeneous economic system.

“The old-world order has changed completely, and we’re now looking at a geopolitical landscape that is much more driven by different spheres of influence,” highlights Mahdi.

This evolving environment is increasingly reflected in markets, shaped by renewed rivalries, strategic competition, sanctions regimes and war.

Recent events – from Russia’s invasion of Ukraine and conflict in the Middle East, to intensifying US‑China tensions and disruption across key trade routes – have reinforced the view that geopolitical tensions are structural.

This has potential implications for how family office wealth is preserved, governed and deployed across generations and borders. As uncertainty, polarisation and complexity increase, jurisdictional risk – once largely a legal or tax consideration – is more deeply intertwined with power dynamics, especially in the context of large cross-border deals.

Technology ecosystems are diverging, and governments are reassessing dependencies on foreign capital, resources, and infrastructure as longstanding alliances are redefined.

This calls for a selective approach to international investing – one where political context, regulatory stability and long‑term alignment are weighed alongside financial fundamentals.

“In a fragmented world, we’re seeing many family offices prioritise businesses they view as globally competitive and resilient to external forces,” notes Mahdi.

“They are also increasingly focused on businesses they believe are less likely to be materially disrupted by artificial intelligence,” he states. “A consistent theme is their adherence to the long-term view.”

Supply chain shocks in recent years have shown how quickly localised geopolitical flashpoints can ripple through trade flows, energy markets, and inflation expectations – amplifying volatility across global markets.

Beyond black swan events that can rapidly transform the investment landscape, broader political risk is less about abrupt regime change or crises and more about gradual policy shifts: export controls, foreign ownership restrictions, capital controls or changes to tax treatment driven by domestic political priorities. These developments may unfold incrementally, but their cumulative impact could still be significant for long‑term capital.

Family offices generally have a broader view of risk than traditional institutional investors. Reputation, legacy, control, governance, and continuity are core considerations alongside financial returns. Geopolitics adds another dimension to this multi‑layered approach.

Many family offices are reframing how they think about risk by stress‑testing portfolios and structures against a wider range of scenarios. Diversification, in this context, extends beyond asset classes to include jurisdictions, currencies and governance models.

For families with liquidity and conviction, uncertainty can potentially be a moment to look through near-term noise and act when others may be constrained.

“As some family offices trim public market risk and increase exposure to private-market strategies with longer time horizons, financing is emerging as a major theme – partly because ‘staying the course’ can often mean raising liquidity without disrupting core allocations,” notes Mahdi.

The importance of flexibility and resilience amid uncertainty

Another response to geopolitical uncertainty is a sharper focus on optionality: maintaining flexibility in how capital is deployed, structured and, where necessary, reallocated.

Building resilience is crucial. Balance sheets should be shaped to withstand volatility, and liquidity is valued not simply as a defensive tool but as a resource that can enable families to act when dislocation creates potential opportunity – a theme also explored in Deutsche Bank Wealth Management’s Family Office Financing Report 2025.

The report’s findings suggested that family offices are adopting a more institutional approach to investing. By setting up “war chests”, they are preparing to rebalance portfolios and manage leverage when asset prices fall.

“The market environment over the last 6–12 months has triggered much more discussion around financing solutions,” notes Mahdi. “It’s notable how leverage is increasingly being used – and how it is being accessed.”

At the same time, families might reflect on the resilience of their operating structures. This includes the geography of holding companies, the location of key decision‑makers, and the robustness of governance frameworks under different regulatory environments. Amid a complex global backdrop, simplicity and clarity increasingly carry strategic value.

Geopolitical considerations may also influence how families think about different asset categories. Real assets, for example, could take on additional strategic relevance when supply chains, resource security and energy transition are shaped by political priorities or market forces.

As family offices have increased allocations to private markets in recent years, portfolios have often become more illiquid, sharpening the focus on how and when liquidity can be generated without compromising long‑term positioning.

A patient approach could be a source of advantage in volatile conditions: families are often able to act against the prevailing mood, leaning in when others are cautious and treating periods of market dislocation as potential entry points rather than moments to exit.

“Shocks will happen, but many families are seeking to look beyond them and steering the same course,” says Mahdi. “They have a long-term, values-driven investment thesis, and that hasn’t fundamentally changed because of recent geopolitical events.”

In periods of heightened volatility, the role of a trusted private banking partner becomes more relevant. Access to balance‑sheet strength, structured liquidity solutions and capital markets expertise may help family offices preserve flexibility amid challenging conditions.

Local market insight, risk analysis and cross‑border structuring support can potentially help families navigate complexity more effectively and avoid forced decisions at inopportune moments, in our view.

Family office governance in a changing world

Geopolitics can shape family office governance directly. Multi‑generational families often span multiple nationalities, residences, and regulatory systems, increasing the value of clear roles, documentation and decision rights. Clarity around processes, documented principles and alignment of risk tolerance can help maintain continuity as external conditions evolve.

“Formal family office governance structures – family councils, investment committees, and boards with independent members – allow families to set values, objectives, and risk appetite at the owner level, while empowering professional outsourced CEOs and CIOs to execute within clearly defined mandates,” explains Mahdi.

A proactive approach may support risk management, while long‑term stewardship enables family offices to balance enduring objectives with shorter‑term adaptability. Ultimately, navigating a fragmented world means building structures, portfolios and governance models that aim to absorb uncertainty, preserve flexibility and support multi‑generational stewardship.

Continuity is key. In an era defined by geopolitical change, the enduring strengths of family offices – long‑term thinking, adaptability and a holistic, multi-generational view of wealth – may prove more relevant than ever.