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December 7, 2020

DBS’ goal to triple family office AuM is ambitious but achievable

By GlobalData Financial

DBS aims to triple its family office assets under management (AuM) by 2025. The goal is ambitious, but aided by strong wealth growth in the ultra-high-net-worth (UHNW) segment, the provider’s strong foothold in the Asia Pacific region, and a rapidly growing offshore market, it is achievable.

DBS’ family office unit aims to achieve annual growth of 20% for the coming three to five years to triple its family office AuM to $10bn by 2025.

Despite a bounce back in wealth market growth in Asia Pacific in 2021 as the market recovers from a COVID-19-induced downturn, this will require above-market growth, according to our Wealth Markets Analytics. Over the next five years, we forecast liquid assets held by high-net-worth (HNW) investors to record a compound annual growth rate (CAGR) of 6.3%. However, the lender focus on the UHNW segment is bound to pay off, with a forecast CAGR of 8.0% in the $10m+ segment.

While not close to DBS’ target, 20% per annum will be achievable if the bank maintains its momentum. Since the unit was set up in 2019, it has registered 40% growth. Now the challenge will be to keep the momentum, but its strong positioning in the wealth space – both in Asia Pacific and globally – will help. DBS now features in the top 25 in terms of AUM in our Global Wealth Management Competitor Analytics, having overtaken J. Safra Sarasin, CIC, EFG International, and Société Générale over the past three years.

Furthermore, DBS is not only competing successfully with global players in its home turf but is set to benefit from inflows from abroad as well. Our surveying shows that 60.3% of wealth managers expect HNW demand for offshore investments to increase over the next year, as investors are looking to further diversify their holdings amid heightened economic uncertainty (9.6% expect a decrease). This, combined with DBS’ solid brand image and the rising importance of Singapore as a booking center thanks to its reputation as a safe haven in times of uncertainty, is further aiding AUM growth.

It will need these strengths, though. The UHNW and family office segment is hotly contested by the largest private wealth managers in the market. UBS, Credit Suisse, and Julius Baer all have large well-developed offerings in the area, and many more of the majors are prioritizing growth in the family office space as well.

However, as DBS moves closer to its goal, it will likely make its way into the top 20 of our Global Wealth Management Competitor Analytics, overtaking AMN AMRO and Crédit Agricole.

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