{"id":17,"date":"2024-04-16T11:45:42","date_gmt":"2024-04-16T11:45:42","guid":{"rendered":"https:\/\/iqeq.com\/in\/2024\/04\/16\/family-offices-in-asia-the-booming-powerhouses-of-asset-management\/"},"modified":"2024-08-07T12:56:45","modified_gmt":"2024-08-07T12:56:45","slug":"family-offices-in-asia-the-booming-powerhouses-of-asset-management","status":"publish","type":"post","link":"https:\/\/iqeq.com\/in\/insights\/family-offices-in-asia-the-booming-powerhouses-of-asset-management\/","title":{"rendered":"Family offices in Asia: the booming powerhouses of asset management"},"content":{"rendered":"
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By Neil Synnott, Chief Commercial Officer, Asia, and Clare Chang, Managing Director, Greater China<\/em><\/p>\n

Asia is a major driver of global family office growth, with a significant number of the world’s high-net-worth-individuals (HNWIs) residing in the region. Originally designed to manage the wealth of HNWIs, family offices\u2019 role has expanded to encompass strategic investments and influencing corporate governance. Looking ahead, favourable sectoral and macroeconomic trends are expected to fuel their continued growth in 2024 and beyond, with a particular focus on Asia.<\/strong><\/p>\n

Asia\u2019s rise in family offices<\/h2>\n

The 2023 Global Family Office Compensation Benchmark Report<\/a> estimates that there are around 20,000 family offices globally today and 9% of the world\u2019s family offices are based in Asia.<\/p>\n

While Singapore continues to be a favourable global family office hub in Asia, Hong Kong aims to attract 200 large family offices by 2025<\/a>.<\/p>\n

It\u2019s true that many factors have fostered macroeconomic instability, such as inflation, soaring interest rates and the resurgence of geopolitical tensions. However, there has been a rapid growth, reflecting the region\u2019s economic development and the emergence of a new generation of millionaires. According to Knight Frank’s 2024 Wealth Report<\/a>, there are over 165,400 ultra-high-net-worth individuals (UHNWIs) living in Asia in 2023, an increase of 2.6% from a year earlier. The current global UHNWI population stands at over 626,600. The report further predicts that this growth rate for Asia \u2013 which equates to around 35 new UHNWIs per day \u2013 will bring the total number of UHNWIs living in Asia to around 230,000 by 2028, which is almost 40% more than in 2023. At this point, only North America will boast a larger community of ultra-wealthy people, but at current growth rates, it won\u2019t be long before Asia takes the crown.<\/p>\n

Asia\u2019s private markets: a favourite among family offices<\/h2>\n

Moving from services focused on traditional wealth management, family offices have gradually conquered new fields of investment. Real estate, infrastructure, private equity, private debt, taxation, corporate structuring, and transfer, as well as the production of accounting and sustainability reports: family offices are now specialising in a broader range of alternative asset classes and sectors in order to offer holistic investment solutions. The UBS Global Family Office Report 2023<\/a> reveals a growing demand for private markets. According to this survey, family offices are actively seeking private equity deals. Asia is characterised by a high proportion of equities (37%) with a clear preference for direct private equity investments (31%). It\u2019s particularly noteworthy that 77% of private equity investments are channelled into technology-oriented companies.<\/p>\n

Asset classes like private credit are gaining traction in APAC<\/a>. Family offices can benefit from attractive risk-adjusted returns offered by private credit, particularly in a scenario where traditional banks are retreating from certain sectors.<\/p>\n

Family offices as influential market players<\/h2>\n

Family offices have long been a silent force in the world of active management, but in recent years they\u2019ve risen to the forefront of financial influence.<\/a> As the number of ultra-high net worth families seeking more control over their investments grows, the family office model is undergoing a remarkable evolution. As family offices gain a larger share of the investment landscape, their influence on capital allocation and market dynamics is becoming more pronounced. This influence extends to shaping corporate governance, promoting sustainable practices, and steering the direction of industries through strategic investments and partnerships. Family offices in Asia have seen impressive asset growth despite numerous challenges. A 2023 report by Campden Wealth and Raffles Family Office<\/a> highlights the region’s resilience, as 58% of family offices surveyed reported growth in assets under management (AUM). The same report predicts a significant shift in family office leadership in Asia, with the next generation taking the helm in many cases. This points to a dynamic and evolving landscape for family offices in the region.<\/p>\n

Looking ahead: a positive outlook<\/h2>\n

Family offices are poised to embrace the future with resilience and a commitment to positive change and steady growth driven by several factors, including:<\/p>\n