Wealthy Asia-Pacific families seek new investments, with focus on growth and private equity close to home, and added digital assets exposure
The world’s largest family office study points to impending shifts in investment strategies
Half of Asia-Pacific (APAC) family offices are realigning their portfolios to pursue more growth-oriented investments – significantly more than those in Europe (35%) and North America (32%).
80% of APAC family offices invest in private equity, and over 90% plan to increase or maintain their private equity investments in 2022.
38% plan to increase their exposure to cryptocurrencies, a notably higher figure than the global average of 28%.
77% of APAC family offices plan to invest more in the region, as do 54% globally.
29% percent of APAC families reported a significant wealth increase in the last year – surpassing the global average of 21% - while 26% of APAC family offices significantly increased their assets under management, versus the global average of 18%.
Hong Kong, 17 November 2021 – Raffles Family Office and Campden Wealth today launched the findings from their Asia-Pacific (APAC) edition of The Global Family Office Report: Regional Series. The publication is based on statistical analysis of 385 surveys with family offices worldwide, with 76 coming from APAC. The average family represented in the APAC volume, known as “The Asia-Pacific Family Office Report”, has US$1.6 billion in wealth. This translates into an estimated cumulative wealth among APAC respondents of $122 billion.
Mr. Chi-man Kwan, Group CEO & Co-Founder at Raffles Family Office said:
“We are honoured to be the first multi-family office and first Asian-headquartered firm to sponsor The Global Family Office Report: Regional Series, which like its earlier iterations delivered important insights on the investment preferences of some of the world’s wealthiest families. The key findings from our 2021 Asia-Pacific edition validated many of the shifts we have witnessed and made provisions for in the course of our business, which caters to both ultra-high-net worth families and their family offices.
“Chief among these shifts is the increased appetite for growth-oriented investments – We have seen an especially strong preference for private equity deals in Asia, and are receiving a growing number of enquiries relating to digital assets.”
APAC Family Offices Are Optimistic and Keen on Growth-Oriented Investments
Four in five family offices believe the world will be in a state of economic recovery in 2022 (slow 56%, or rapid 24%). Following the aftermath of the COVID-19 pandemic, family offices are aligning themselves for economic recovery, by seeking new investment opportunities (59%), realigning their investment portfolios to pursue more growth-oriented opportunities (50%), and diversifying their portfolios (41%). Moreover, a year-on-year comparison shows that family offices are shifting towards a growth-oriented strategy; this is visible both in APAC and across the globe. In APAC specifically, 19% of family offices favoured growth in 2019. This increased to 24% in 2020, and 30% in 2021. Half of family offices in the region today expect to shift to growth in 10 years’ time.
Interest in Private Equity Investments Remains High
A notable 80% of family offices in APAC invest in private equity. Within their private equity portfolios, there is a preference for direct investments (57%) over fund-based investments (43%). APAC family offices also prefer having an active management role in their direct investments (32%); a stance that is similar to their regional counterparts in Europe (33%), but higher than North America (24%). The most popular private equity deals for family offices in APAC are venture capital direct investments, with 59% of family offices allocating to the asset class. This is slightly higher than the global average of 53%. Investors in APAC additionally show a strong appetite for growth-oriented direct investments (57%) and growth-oriented private equity funds (49%).
Ms. Jo Huang, Managing Director, Private Equity at Raffles Family Office said:
“We are seeing increasing interest among our clients in direct private equity investments and are actively addressing this through our pipeline of direct deals that offer attractive risk-adjusted return profiles and exposure to fast-growing sectors, such as electric vehicles, biotech, fintech and blockchain.”
Family Offices Globally Plan to Increase Investments in APAC
More than half (54%) of family offices across the globe plan to increase their investments in APAC. Among family offices that are based APAC, 77% plan on increasing their investments in their home region. Looking within APAC, nearly half (45%) of family offices across the globe currently have investments in China. A further 14% do not invest there, but would like to in the future.
APAC Family Offices Show Growing Interest in Cryptocurrency
While only 19 percent of family offices in APAC invest in cryptocurrency – far less so than the 28% and 31% in Europe and North America respectively – more than half (53%) of respondents in APAC see cryptocurrency as a promising investment. This is not as popular a view in Europe (33%) or North America (43%).
Furthermore, more than one-third of family offices in APAC plan to increase their investment in cryptocurrency in 2022. This is significantly higher than expected allocations to cryptocurrency in Europe (17%) and North America (30%).
Family Offices Increasing Assets Under Management as Families Boost Wealth
Three in four families’ wealth rose over the pandemic and seven in 10 family offices saw an increase in assets under management (AUM). Rising asset prices, unprecedented stock market gains, the tech boom, and record deal-making and valuations in private markets are some of the factors behind these increases.
Dr. Rebecca Gooch, Senior Director of Research at Campden Wealth said:
“Looking at this research from a global perspective, we can see that despite the pandemic, both families and family offices faired exceptionally well. In fact, 79% of the families we examined globally actually saw their wealth increase in the last year, along with 61% of family offices’ AUM. Therefore, in the midst of these difficult times, family offices, known for being nimble investors with deep pockets and patient capital, have shown their strength at not only riding the economic wave, but shifting the winds in their favour.”
About Raffles Family Office
Raffles Family Office (RFO) is an award-winning commercial multi-family office with a full suite of investment management services for ultra-high net worth individuals. An integrated platform that combines independence with advisory expertise across a broad range of asset classes, and an expansive global partnership network built for seamless collaboration with the world’s leading financial institutions, RFO is uniquely placed to offer comprehensive, lasting and highly bespoke wealth growth and preservation solutions. RFO is headquartered in Hong Kong and has branch offices in multiple Asian financial centres, including Singapore, Shanghai, Beijing and Taipei. For additional information, visit https://www.rafflesgroup.co
About Campden Wealth
Campden Wealth is a family-owned, global membership organisation providing education, research and networking opportunities to families of significant wealth, supporting their critical decisions, helping to achieve enduring success for their enterprises, family offices and safeguarding their family legacy.
Campden Research supplies market insight on key sector issues for its client community and their advisors and suppliers. Through in-depth studies and comprehensive methodologies, Campden Research provides unique proprietary data and analysis based on primary sources.