Global family offices eye greater investment into Asia-Pacific, artificial intelligence: UBS
35 per cent of global family offices say they will allocate more assets to the region in the next five years
OVER a third of single-family offices across the world are planning to increase their investments into Asia-Pacific (Apac) – excluding the Greater China region – in the next five years, according to a report published on Wednesday (May 22) by UBS.
On average, 50 per cent of family offices have kept their largest regional allocations in North America. Over a quarter (27 per cent) have their largest regional allocations in Western Europe, and 17 per cent in either Apac or Greater China.
Looking ahead, Apac looks to be an increasingly attractive region, with 35 per cent of global family offices saying they will allocate more assets to the region in the next five years. Another 50 per cent indicated that they will keep their investments into the region at the same levels.
This is second only to North America, where 38 per cent of respondents said they will increase their investments in the region and 52 per cent said they will stay the same.
UBS’ Global Family Office Report 2024 gathered insights from 320 single family offices spanning seven regions, with an average net worth of US$2.6 billion. A third of the respondents for the survey were from Apac.
UBS Global Family Institutional Wealth Apac head Koh Liang Heong said that over the next five years, almost half of Apac family offices plan to allocate more assets to the region, which is set to be the top investment hotspot globally.
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He noted that Apac family offices also plan to add fixed income and equities from developed markets, as well as private equity and hedge funds over the next five years.
“Private equity and hedge funds continue to be the favourites among family offices to keep their portfolios well-diversified and achieve better investment returns,” Koh said.
AI, healthcare among top investment themes
Meanwhile, generative artificial intelligence (AI) emerged as the most popular investment theme among family offices, with 85 per cent of Apac family offices indicating that they are likely to invest in the space over the next two to three years. This was higher than the global average of 78 per cent.
Some 72 per cent of Apac family offices also said they are likely to invest in healthtech, as well as automation and robotics (71 per cent).
On the sustainability front, healthcare was seen as the top theme. Some 59 per cent of Apac family offices said they are focusing on or are looking to better understand healthcare in their sustainability efforts.
“Obviously, there’s a very large opportunity in this region given the need for infrastructure in that space,” said Claude Harbonn, co-head of UBS’ ultra high net worth (UHNW) Solutions Group.
“Whenever we launch funds in the healthcare space in Asia, we have a very large and wide pickup because I think people are more attuned to the gap in the market.”
Other top sustainability themes of Apac family offices include clean, green and climate tech (40 per cent) and philanthropy (39 per cent).
Compared to their global peers, Apac family offices are more likely to focus on impact investing (36 per cent), education (36 per cent) and carbon markets/carbon capture and removal (21 per cent).
“The pickup in appetite towards investing in Asia is also because of the slowdown in the last couple of years… now the growth impetus is coming back and people are looking to invest back into Asia,” said Koh. “Asia is still the area that would be the growth engine in the long term.”
In response to a question on competition between family offices in Hong Kong and Singapore, Koh pointed out that both regions have “slightly different” areas of focus. While Hong Kong caters to the Greater Bay Area, Singapore is seen as a hub for Asean.
He added: “I cannot find goose in Singapore, and I cannot find good chicken rice in Hong Kong. These two regions really complement each other very well, and both competing with each other will push each other towards better excellence.”
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