Family Offices Increase in Sophistication, Embracing Systems-Level Impact Investing

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A new survey conducted with 121^ family office representatives and asset owners from across Asia Pacific and beyond finds that investor sentiment towards sustainable investment remains positive despite a year of pronounced geopolitical and financial turbulence. There has also been a sharp rise in the share of family offices allocating more than half their portfolio to impact and ESG strategies this year. But that renewed conviction is not translating into broader diversification: capital is concentrating around a narrower set of established sectors and geographies, as investors lean towards practical, well-understood deployment routes rather than experimentation. This same instinct shows up in the community's top-ranked challenge, which reflects investors do not lack appetite to deploy capital, but have difficulty sourcing curated products and finding trusted co-investment partners.

Family Offices Increase Conviction and Sophistication

Over 86% of respondents report allocating some of their portfolio to sustainable investments, on par with previous years – but the shape of that commitment has changed, with capital shifting towards higher concentration and conviction in sustainable assets. 27% of respondents have put more than half their portfolio into impact and ESG strategies, up from 17% in 2025. Further affirming this trend, the proportion of investors materially exposing their portfolio to impact (defined as allocating more than 10% of their portfolio to impact) grew to 58%. 

However, it is worth noting only 8% of respondents are allocating 31%-50% of their portfolio to impact, underscoring a barbell pattern in which many family offices are either still testing the waters or already committing at scale, rather than building gradually through the middle. 

When assessing financial performance, 54% of respondents selected the new option "too early to assess," reflecting the long-dated and still-deploying nature of many impact portfolios. Meanwhile, 36% of respondents said returns are in line or exceeded expectations, reflecting a positive tilt in portfolio performance.

"Family offices aren't just committing to impact – they're polarising around it," said Katy Yung, CEO of Sustainable Finance Initiative. "Those who are in, are going all in, whilst a new wave of impact investors are still testing the waters. What's disappearing is the middle ground – and that tells you something about how conviction is hardening at the top. In a more volatile market, that clarity matters."

Thematic Shift Towards Food and Agriculture and WASH

On thematic interests, the picture has shifted materially, but not evenly. Food and Agriculture now ranks first, consistently placing in the top two, with WASH (Water, Sanitation & Hygiene) – expanded this year to include oceans – in second place, and new energy and mobility and healthcare also remaining near the top tier. Conversations we hear on the ground suggest the renewed interest in food and agriculture is increasingly shifting upstream towards farm productivity, precision agriculture, biological inputs, and AI-enabled decision tools, whilst consumer-facing downstream categories have seen more valuation pressure. Heightened geopolitical risk to global food security, following disruption to key grain-exporting regions, has sharpened this focus further.

One of the most notable shifts this year is thematic. Food and agriculture now ranks first, consistently placing in the top two, with WASH (Water, Sanitation & Hygiene) – expanded this year to include oceans – in second place, and new energy and mobility and healthcare also remaining near the top tier. Conversations we hear on the ground suggest the renewed interest in food and agriculture is increasingly shifting upstream towards farm productivity, precision agriculture, biological inputs, and AI-enabled decision tools, whilst consumer-facing downstream categories have seen more valuation pressure. Heightened geopolitical risk to global food security, following disruption to key grain-exporting regions, has sharpened this focus further. 

Meanwhile, nature-based solutions, biodiversity and regenerative practices, last year's top theme, fell to seventh place. Taken at face value, this looks like a retreat from nature-based investing altogether. But the picture may be more nuanced: Suggesting to replace with - this year's WASH category was broadened to include oceans, and a large part of ocean-related investing – blue carbon, mangrove and coastal wetland restoration, coral reef rehabilitation, to name a few – intersects with nature-based solutions. Therefore, some of WASH's rise may reflect interest in some nature-based solutions being recaptured under a new label, instead of any genuine decline. Since “oceans” has not been a standalone category, we are unable to isolate how much of the shift is reclassification versus real growth in water and sanitation investing, but our overall interpretation of the results supports a reading of broad diversification of interest rather than a dramatic reshuffling of thematic interest. 

Maturing Asia Pacific Market Move Towards Systems Investing

Geographically, Asia Pacific remains dominant, with 43% of respondents allocating to the region, indicating sustained regional concentration. North America and Europe both received modestly higher interest than last year, overtaking Africa which moved to fourth place in investor focus. Whilst the reasons for changing geographic focus are likely multifaceted, factors such as distance, market familiarity and deal-execution considerations may influence how readily APAC-based family offices convert interest into active allocation.

In terms of overall investment approach, 31% of respondents said they are using Systems Investing, and 27% said they are using Total Portfolio Approaches. Both approaches gained more adherents compared to last year, when they were cited by an equal 24% of respondents, indicating a willingness amongst investors to integrate impact into their portfolio construction. Combined, more than half (58%) of respondents now describe their approach through a systems or total-portfolio lens rather than a standalone carve-out – and for the first time, systems investing has overtaken opportunistic allocation as the single most common approach, a sign of rising sophistication in how family offices are structuring their impact exposure.

Challenges Remain on Access and Exit

Yet challenges continue to constrain the community. Identifying quality deal flow with viable exit options remains investors' top challenge for the third consecutive year, cited by 26% of respondents, and growing from 21% in 2025. Finding suitable sustainable investment products (cited by 19% of respondents) and like-minded peers for co-investment (selected by 18% of votes, up from 11% in the previous year) follow.

The persistence of deal flow as the top-ranked challenge across three consecutive years signals that the bottleneck in this market lies not in motivation but supply: investors are not short on appetite to deploy capital, they are short on curated products and trusted co-investment partners. It is exactly the gap that SFi has focused on narrowing, working alongside partners globally to help early-stage ideas take shape as deployable, investable opportunities.

When asked about preferred asset classes and funding options, investors continue to take a hands-on approach, with 19% looking at venture capital/private equity, followed closely by direct investments into ventures at 18%. We also note a slight growth in using grants/donations (15%, up from 12% in 2025) to generate impact, alongside a retreat from blended finance/outcomes-based vehicles (11%, down from 14% in 2025). Meanwhile, 9% of respondents are interested in using evergreen structures, a new category this year, pointing to a growing appetite amongst investors for longer-dated, more liquid vehicles that sit outside the traditional lock-up periods associated with venture and private equity commitments.

Outer Space Allocation Requires Credible SDG Link

A new question this year tested whether commercial outer space belongs in an impact portfolio. Views were split: 40% see it as a vanity play diverting capital from proven solutions, whilst 22% would only consider it with a credible link to SDG outcomes, and 14% already view satellite and climate-monitoring infrastructure as core to impact. Just 4% are actively allocating today – suggesting space remains a highly conditional frontier rather than a mainstream allocation.

Wrapping up the results, Yung concluded: "From 2025's early signals to this year's sharper and more demanding data, our recent findings reflect a community that has crossed a threshold. Impact investing has clearly earned its place in a serious portfolio. What our community is now working through, with greater urgency than ever before, is how to find more of the right deals, in the right structures, with the right partners. That is exactly the work SFi exists to support, and I look forward to continuing that journey together."

^ Not all respondents answered every question in the survey; unless otherwise stated, percentages reflect the share of votes cast on each individual question, not the share of all 121 participants.

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