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February 16, 2012updated 04 Apr 2017 3:43pm

Singapore set for family offices boom

Singapore is expected to fully embrace the more traditional family office model, according to a report written by Richard Wilson, founder of the Family Offices Group association. The city-state should be a prime location for family offices since the report notes Singapore has the highest concentration of millionaire households and 15.5% of all its households have at least $1 million in assets under management (AUM).

By Thomas McMahon

Singapore is expected to fully embrace the more traditional family office model, according to a report written by Richard Wilson, founder of the Family Offices Group association.

The city-state should be a prime location for family offices since the report notes Singapore has the highest concentration of millionaire households and 15.5% of all its households have at least $1 million in assets under management (AUM).

It also has the ninth highest concentration of ultra-high-net-worth households, which are categorised as those with over $100 million in AUM.

Despite the huge number of high-net-worth individuals and billionaires currently residing in Singapore, Wilson says it has relatively few family offices, but that is expected to change in the coming years.

Wilson says: “There are already dozens of family offices working in Singapore and [this] has made the concept more familiar to Singapore and Southeast Asia’s wealthy, laying the groundwork for future family office growth.”

He explains that the number of family office and wealth management conferences in Southeast Asia and Singapore, and the number of hedge funds and private equity firms setting up new offices to service clients in the region, also signal the coming boom in family offices in Singapore.

Cultural barriers

A number of cultural and economic barriers have prevented family offices proliferating as widely in Singapore and Asia, as in other parts of the world, such as the US.

In June 2011, Terry Farris, head of family office advisory at Singapore-based DBS Private Bank, told Private Banker International (PBI) that there were between 25 and 30 true family offices in Asia.

Rohit Sarin, co-founder and managing partner at Mumbai, India-based multi-family office Client Associates, has also said there are plenty of reasons for business owners to keep wealth within their businesses in Asia. These go beyond cost considerations and habit.

In the June 2011 issue of PBI, Sarin said: “Of course, the thinking is that you keep ploughing back major parts of your wealth back into your family business.

“That also stems from the socio-economic values of Indian families. A lot of business families have large family structures and the businesses are usually jointly owned. The business continues to be an overall holding platform for their wealth.”

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