FAMILY offices in the Asia-Pacific that manage wealth for high-net-worth individuals cut back their asset allocations to Greater China last year, deterred by policy uncertainties and rising geopolitical concerns, a UBS report has said.

A survey of 45 single family offices in the region, part of a global survey, showed that allocations to Greater China fell to 23 per cent in 2022, from 40 per cent in 2021.

Only 15 per cent of Asia-Pacific respondents plan to increase investment in Greater China in the next five years, the survey found.

Among global respondents overall, a slightly larger 22 per cent plan to raise investment, although their allocation to Greater China was only 7 per cent in 2022, down from 9 per cent the year before.

Respondents were more bullish on the region excluding China, with 31 per cent of both Asia-Pacific and global respondents planning to boost investment there.

L H Koh, co-head of global family and institutional wealth Asia-Pacific at UBS Global Wealth Management, said investors shied away from China mainly due to policy uncertainties last year that affected its property, education and tech sectors.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Geopolitical risks remain a top concern among investors, as tensions were rising with the United States over technology and trade issues, but Koh said some foresee opportunities emerging after China eased Covid 19-related restrictions.

“In more recent conversations with clients, we are seeing appetite coming back as China reopened,” he said, also noting rising concerns about a possible US recession.

Among asset classes, family offices in Asia-Pacific had the highest allocation to equities, with the lion’s share tied to developed markets, the survey found. It was conducted from January to March and covered 230 single family offices worldwide, with average net worth of US$2.2 billion.

Almost half of the Asia-Pacific respondents used hedge funds to diversify, compared with a third of family offices globally. REUTERS