By Jeremy Gaunt, European Investment Correspondent

LONDON (Reuters) - Europe's wealthiest families are planning to shift their investments further away from traditional assets into alternatives such as hedge funds and commodities, a report shows.

The survey of European single family offices conducted by wealth management specialist Campden Media and investment bank Merrill Lynch found that alternatives would make up more than half of a typical family office portfolio in three years.

Family offices are professional investment groups set up around the private wealth of rich individuals and their families.

The survey looked at 30 of them in 10 European countries, around 39 percent of whom managed more than 1 billion euros (767 million pounds) in assets.

It showed a typical portfolio holding 55 percent of its assets in hedge funds, commodities, property, private equity and other alternatives in three years, compared with 48 percent now.

Traditional investments such as stocks, bonds and cash would fall to 45 percent from their current level of 52 percent.

Gary Dugan, Merrill's chief investment officer for wealth management, said the shift in emphasis was a reflection of a need for long-term returns rather than a reaction to current market trends of falling equity markets.

"It is a deep decision," he said. "You would try to take as long a view as possible."