asia pacific

Family Offices Set to Boom in Asia

by

March 15, 2012

Family offices are growing in importance for investing in private equity and individual deals, so we keep our eye out for trends in FOs. The latest item is a new study on family office trends in Asia, published by UBS and Campden.

 

They discovered that the massive growth in the wealth of the Asia-Pacific in the last twenty years  has yet to seriously impact the growth of family offices in the region. Estimates show that little more than 100 single family offices are based in Asia, which is small compared to the estimated 2,500 family offices globally.

 

One of the report’s authors said that family offices are well established in financial centers such as Hong Kong and Singapore, and that growth is expected as entrepreneurial families in India, China and Taiwan, as well as in South East Asia set up family offices.

 

The study is based on a survey of the size, features and the concerns of family offices in the Asia-Pacific. Entitled Growing Towards Maturity: Family Offices in Asia-Pacific Come of Age, the publisher claims it is the first extensive survey on the family office landscape in Asia-Pacific.

Other key findings listed by Campden

  • Strong link between existing FOs in the region and their family business (80% are still connected to the primary business where the money was first made).
  • Asia-Pacific FOs have a large proportion of their assets tied up in core family business holdings and illiquid assets. Liquid assets only make up 40% of their total wealth.
  • Hong Kong, Singapore and Australia are perceived to be the most attractive locations to set up FOs due to favorable economic, social and tax conditions.
  • FOs in the region are not big employers; almost 40% employ less than six full-time staff, with 63% of offices employing family members. In Europe, Single Family Offices employ an average of 13 people.
  • Confidentiality is the key cultural factor affecting willingness to outsource services and appoint third party providers (eg. global custody services).
  • Family offices in Asia-Pacific are more likely to want to bring services in-house, like the chief investment officer role, than outsource. In Europe and the US there is more of a tendency to want to outsource investment functions.
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