Consolidating Versus Expanding Relationships During Periods of Uncertainty

Charles Stucke

03-09-2026

During the past few years, many family offices and institutional investors focused on consolidating the number of manager- or investment-relationships on their balance sheets. Fewer line items felt better and easier to govern. Disappointing investments and relationships needed to be trimmed, under-performers cut. After years of line-item expansion, a natural culling seemed in order and judgments to consolidate felt like common sense.

Over time, portfolios breathe. This was the exhale after a big and long breath in. Investors validated this decision by looking at investment-specific performance within portfolios. The number of winners narrowed (think Mag 7, a handful of privates, a few exceptional hedge funds). Standouts now looked certain and obvious in hindsight, as did weaklings. For those who hadn’t culled relationships and consolidated by 2025, a spring cleaning beckoned.

Yet, we exist today at a time of generational uncertainty. I cannot emphasize this or the following assertion enough: the best defense for uncertainty in the world of investments is thoughtful diversification. Investors should consider how to fully lean into its benefits despite the prevailing sentiments of the past five or so years. This applies to relationships as well as line items.

The family offices and institutions that culled holdings are now prepared to reset the relationships within their portfolios. Well done. They should begin to do so in earnest when faced with today’s opaque future and its wide-ranging potential outcomes. Having the right new relationships could become existentially valuable as portfolios enter this next phase of immense economic, social and political change.

Today’s heightened uncertainty exists along these three dimensions. A handful of reasons for adopting them as a framework for organizing change deserve special highlighting.

Dimensions of heightened uncertainty

Economic

• The rapid development of artificial general intelligence (AGI) impacts all of these realms, probably so profoundly that it feels like the incredibly obvious observation it is. We need to recognize the potential for transformation it portends.
• Collapsing demographics and rapidly aging populations in the West threaten economic models that rely on something akin to a multi-generational Ponzi scheme of humans, which kept the historical wave of economic activity going. As the saying goes, demographics are destiny. We don’t know what destiny follows an era of robots and low birth rates.
• Markets have consumed the simple optimism of low-tax growth for an incredibly long time now, all the while having climbed their proverbial wall of worry. It’s tempting to say that the exceptional growth must stop soon. But one could imagine a world in which robot- and AI-powered markets and GDPs run even faster while employment falls off a cliff. In such a world, the most important consumer could shift from being the global population at large or the U.S. household to being massive, private- and government-sponsored capital projects hoping to fully digitize activity and explore space. Either way, we don’t have any idea what this looks like right now.

Social

• The coming transfer of wealth from aging boomers to millennials and Gen Z households may profoundly shift ownership and governance of assets in our economy into new models. We don’t fully understand the potential outcomes of this transfer (think more consolidated governance through passives, less transparent private markets, estate planning and tax constraints at unparalleled scale). Plus, our new owners might have new goals. We can guess what they might do, but we don’t know what they will do.
• While all of the above is taking place, the potential for massive structural changes in education due to changing workplace needs will surely come with unexpected and impactful consequences. More than 100 years ago, education across society morphed almost unrecognizably to accommodate the needs of the industrial revolution. This impacted, well, everything. Education will change again to accommodate AGI. And education’s future is already in a state of play.

Political

• Global decoupling, rising populism, economic nationalism and the potential for a reframing of the relationship between now-robot-enabled capital and labor all sit on the table today. They stare up at us with impetuous zeal. We can’t possibly predict with any degree of accuracy where our civilization will go in the face of all of them at once. We can only speculate and prepare to be wrong.
• We remain a world at war. Bad and unpredictable things happen during wars.

Fate won’t give us its script. We shouldn’t pretend to know things we can’t know. People often struggle with not knowing where we are headed, so we shouldn’t bet so confidently that a now-smaller group of investments or advisors will help us best identify the right path and capture its benefits. Even if we don’t know what change will come, we know what’s coming is big. We need to grab a piece of that change as we see it happening and build from there. As we enter the spring of 2026, we should begin planting new seeds.

Family offices can diversify their base of advisors and investments to increase the chances that they get their foothold in the future. Now is the time to start doing so. Diversifying advisors and investments a bit more than usual gives these offices the greatest chance of successfully navigating the risks and rewards inherent in today’s uncertain world. Family office investors need to hear a few more opinions than they did ten years ago. Then, they can strategically narrow these voices once they’ve navigated this heightened uncertainty and see the narrative stabilize.

We don’t really need to know the answers; we just need to prepare well to find them. If we catch the green shoots wherever they lie, we know we can grow from there.