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).
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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.
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By GlobalDataCultural 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.”
