Asia-Pacific Family Offices Thrive Amid Market Challenges: Insights from The Asia-Pacific Family Office Report 2023
Over half of the family offices in the Asia-Pacific region have seen their assets under management (AUM) grow, despite challenging market conditions, according to the Asia-Pacific Family Office Report 2023.
Published by Raffles Family Office and Campden Wealth, the Report highlights the resilience and adaptability of these families in managing dynamic market conditions, with their investment performance exceeding expectations and outperforming most major financial markets..
The Report is based on a survey conducted from April to September, covering 330 family offices globally, including 76 from the Asia-Pacific region. Among these 76 offices, 58% reported an increase in AUM, with 32% noting a rise of over 10%.
The total wealth of the surveyed Asia-Pacific families was estimated at US$68 billion, with a combined AUM of US$41 billion. These families have adopted innovative asset-allocation strategies to mitigate the impact of inflation and rising interest rates, such as shortening fixed-income bond portfolio durations, reducing borrowings, and increasing equity exposure.
Although the challenging financial markets in 2022 led to temporary alterations in investment strategies, Asia-Pacific family offices are now refocusing on growth strategies. The proportion of these offices pursuing a growth strategy dipped to 33% in 2022 from 35%, but rebounded to 36% in 2023, with a projection to reach 43% within five years.
Kwan Chi-man, group chief executive and co-founder of Raffles Family Office, observed a remarkable evolution in these offices, with an embrace of innovative strategies for navigating dynamic markets. Currently, 15% of Asia-Pacific family offices are controlled by the next generation, a figure expected to rise to 47% over the next five years, indicating a significant generational shift and profound changes in investment and management strategies.
The report also noted a shift in investment priorities, with real estate emerging as the top asset category for future investments, followed by developed-market bonds and equities, and private debt. Private markets, including private equity, venture capital, and private debt, now comprise 26% of the average portfolio in these family offices, closely aligning with the global average.
Geographically, family offices are focusing on Asia-Pacific (excluding China) and the US, and are starting to invest in Africa and the Middle East. In terms of technology investments, artificial intelligence (AI) is highly sought after, with a significant number of family offices planning to increase their AI exposure. Climate change mitigation, fintech, and healthcare remain popular investment areas, while there is a notable move away from cryptocurrencies.
The report predicts wealth-aggregation platforms to be the next significant trend, with 30% of Asia-Pacific family offices interested in leveraging these solutions, which offer consolidated financial data from multiple banks and investment managers. The adoption rate of these platforms is currently at 30%.
In the survey, Singapore had the highest percentage of family offices, followed by Hong Kong, India, and Australia.
To view the report, follow this link: https://www.rafflesgroup.co/the-global-family-office-report-series-asia-pacific-2023/
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