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Asian-Pacific Family Office Trends: Private Equity and Real Estate Rising

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November 21, 2013

Asia-Pacific’s wealthiest investors are allocating more money into direct investments and away from capital markets, says a new report from survey entitled Growing Towards Maturity: Family Offices in Asia-Pacific Come of Age.

 

Those surveyed (25 family offices completed an extensive questionnaire) are attracted to private company and real estate investments, rather than equity and bond markets. The APAC region is similar to European trends where direct investing has also been rising in the last few years, according to the analysts.

Key Findings

– Real estate accounts for 16% of allocations this year, compared with just under 9% in 2012

– Allocations to venture capital and direct private equity grew to 15%, compared with 4% in 2012.

– Equity market allocations down by 7% to 14% of total assets

– Hedge fund investing down by 50%

– Cash holdings among family offices were still strong in all countries, but particularly so in Hong Kong.

– The analysts said that it is not surprising that APAC family offices are attracted to private equity because many of the wealthiest own family businesses.

– Asia’s wealthy families are more optimistic about investment prospects than a year ago.

– Hong Kong and Singapore are prominent wealth centers in Asia-Pacific, and are where the majority of family offices are being set up – more than 75% of those established in the last 10 years in the region have been launched in the two cities.

 

In a separate report reflecting an increase in wealth in APAC, UBS said that the number of billionaires is increasing fastest in APAC, faster than any region worldwide. It increased by 13 percent, year on year. Asia has also had 18 more billionaires, the largest number of additional names this year. (See graphic  from the Wealth Census from UBS for a trend line.)

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