Integrating long-term themes into family office portfolios 

Over the past few years, thematic investing that focuses on long-term structural trends such as energy transition, healthcare innovation or AI has become a mainstream focus in the investment industry.. For family offices, a thematic investing approach offers opportunities to generate competitive returns whilst also aligning with long-term beliefs and cross-generational family values.

When done well, thematic investing also has the potential to enhance returns and diversify sources of alpha. Though complex and often challenging to implement, the potential rewards can make the effort worthwhile. When executed thoughtfully, thematic investing can span the entire portfolio, bridging public and private markets alike. The challenge lies in building this exposure in a disciplined, scalable way - grounded in analysis rather than hype.

Our framework offers family offices a practical way to approach thematic investing from a total portfolio perspective, starting with the following considerations: 

Before building a thematic investing strategy, it’s essential to assess your starting point. Family offices may already have some level of thematic exposure - whether by design or as a byproduct of broader investment choices. In listed equities, portfolios are often tech-heavy, particularly those with a global equity focus and high exposure to the US. This bias can stem from the dominance of large-cap growth stocks, which means that while there is thematic exposure - primarily to technology and innovation - it often lacks diversity and thematic purity. Beyond tech, there’s typically limited exposure to other structural trends, if a benchmark like construction is held.

Private markets, on the other hand, tend to exhibit a much stronger thematic orientation. Here, exposure is often more deliberate and aligned with specific themes - like technology, healthcare innovation, sustainable infrastructure, fintech or natural capital. This is because of inherently longer timeframes, which more closely align with those themes and some themes, by their nature, are better captured in private markets. Real assets, for example, frequently embody long-term structural trends, from renewable energy projects to urban development. As a result, family offices may already hold significant thematic positions within their private portfolios, even if not explicitly labelled as such. Despite these pockets of thematic exposure, many portfolios may lack a cohesive strategy and seem to be the result of opportunistic choices. To move forward, family offices need to conduct a thorough analysis of their portfolios to understand where thematic elements already exist and where there are gaps to be addressed.

Family offices looking to integrate long-term thematic investing typically seek a strategic, disciplined approach that delivers material exposure at the total portfolio level. Themes should not be marginal or niche - they need to be substantial elements of the overall allocation. To potentially achieve this, it’s imperative to identify multiple high-conviction structural trends rather than betting on a single idea. Diversifying across themes mitigates concentration risk and supports a balanced risk budget, which may allow the portfolio to absorb performance shifts without becoming overly reliant on one trend. However, deciding which themes to pursue requires a robust framework. It’s essential to distinguish genuine long-term opportunities from fleeting hype - the kind of ‘speculative’ investing that can hinder portfolios when public markets rapidly swing from one theme to another.. Thematic investing can offer a forward-looking perspective, breaking free from backward-looking sector classifications and narrow benchmarks. It can provides clarity of purpose, whether the focus is on combating climate change, advancing healthcare innovation, or anticipating transformative shifts in energy and food systems.

For family offices, thematic investing also has a legacy dimension. It encourages the next generation to take an active role in shaping the portfolio, advancing alignment between investment goals and family values. Thoughtfully executed, thematic investing can bridge the gap between wealth preservation and purpose, blending investment strategy with philanthropic vision and impact.

To effectively engage in thematic investing, family offices should adopt a structured approach.

This begins with defining the investment beliefs based on the family’s values that will drive the choice of themes to pursue.

Second is a comprehensive analysis of the existing portfolio - looking beyond surface-level labels to uncover the true thematic exposure embedded in the portfolio. This look-through assessment helps distinguish between genuine thematic investments and incidental exposure driven by broader market trends.

Once the current positioning is clear, the family can complement existing themes with specialist strategies. In public markets, this might mean balancing broad thematic ETFs with more focused active strategies or direct investments in companies at the forefront of thematic innovation. In private markets, the focus often shifts to venture and growth capital for early-stage themes, private equity for operational control, and co-investments to deepen exposure while managing fees. Credit strategies can also play a role - whether through green bonds, transition finance, or thematic private debt, capturing opportunities that traditional fixed income might overlook. Real assets like infrastructure, sustainable agriculture, and urban real estate offer long-term exposure to structural changes.

However, if not executed properly, thematic investing can lead to disappointing outcomes.  Returns are heavily influenced by the specific theme, timing, and manager selection, making return expectations difficult to formulate. Thematic exposures can be volatile, dominating risk budgets and skewing overall portfolio dynamics. The long time horizons required for thematic investing may conflict with the need for regular performance reviews, creating tension when results are slow to materialise. Additionally, the interaction of thematic investments with existing exposures can complicate portfolio management, as standard risk measures may be inadequate.

To mitigate these challenges, it’s vital to combine a top-down perspective - identifying how themes align with structural growth - with a bottom-up analysis of company quality, governance, and valuation. This balanced approach ensures that thematic exposure is not only theoretically compelling but also resilient and thoughtfully integrated into the broader portfolio.