Allocations to hedge funds declined, falling to 6.2 percent of the average family office portfolio, the survey found. Among multi-year participants in the survey, the allocation fell to 7.1 percent in 2016 from 8 percent in 2015 amid concerns over their ability to generate satisfactory returns, it said.

That came despite better performance, with the funds rising 0.8 percent last year after falling 2.6 percent in 2015, the survey said.

Around 30 percent said they were likely to decrease their hedge fund allocations ahead, the report found.

The ultra-wealthy were also putting less money into real estate, with the average allocation among multi-year respondents slipping to 15.8 percent this year, from 16.5 percent in 2016, the survey said.

“While this is most likely the result of the enhanced performance of other asset classes and a lack of portfolio rebalancing, some observe that the real estate market may be beginning to peak in developed parts of the world, such as North America and parts of Europe,” the report said.

But family offices were still interested in real estate, with 40 percent saying they were planning to increase their investments going ahead, the survey found.

Portfolios performed better last year, rising an average 7 percent in 2016, compared with 0.3 percent in 2015, the survey said.

Family offices in North America performed the best globally last year, averaging a 7.7 percent annual return, largely due to lower allocations to real estate, which was weaker in 2016, the report said.

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