Asia-Pacific family offices least likely to have investment committees, survey finds

FAMILY offices in the Asia-Pacific are least likely to have investment committees, compared to such private wealth-management firms in other regions. They are also most likely to not be separated from their family businesses, a survey has found.

Under half – 45 per cent – of survey respondents from the Asia-Pacific said their family office had an investment committee. Among family offices in Latin America, the figure is 65 per cent. In the EMEA (Europe, the Middle East and Africa), 57 per cent have such committees; in North America, 48 per cent do.

This was one finding of The Global Family Office Survey Insights 2023, released by Citi Private Bank’s Global Family Office Group on Thursday (Sep 14).

The survey also found that nearly a quarter (24 per cent) of Asia-Pacific family offices had not separated from their family businesses. This figure was higher than the 19 per cent among North American family offices, 18 per cent of EMEA offices, and 9 per cent of Latin American ones.

Overall, the survey found that while two-thirds of families had separated their family office from the family business, less than half had governing boards or formal strategic plans.

The survey report said: “Family offices are continuing to professionalise their activities beyond just investments, bringing more structure to their approach. However, there is still some way to go.”

The study done early this year drew 268 participants – the highest number since the survey began. Participants from the Asia-Pacific accounted for a fifth (21 per cent) of the pool of respondents.

They had to answer more than 40 questions aimed at gauging investment sentiment and what they were doing with their portfolios amid ongoing geopolitical tensions, macroeconomic headwinds and market volatility. The findings thus outline the key challenges and areas of opportunity for investors and their family office clients in the year ahead.

On the topic of broad portfolio reassessment, the survey found that 54 per cent of the Asia-Pacific respondents had raised their cash allocations amid global uncertainty – higher than in other regions: In Latin America, only 34 per cent have done so; the figures were 40 per cent in EMEA and 51 per cent in North America.

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Compared to their peers in other regions, Asia-Pacific respondents (at 69 per cent) were the least likely to engage in direct investments, although direct investing continues to be a focus globally.

Preserving the value of assets emerged as the most important for families in this region, with 74 per cent of the Asia-Pacific respondents saying so – a higher proportion than in other geographical segments. This was also the top concern reported by respondents globally (at 68 per cent), followed by preparing for the next generation to be responsible wealth owners (60 per cent) and ensuring shared goals and vision for the family (52 per cent).

The survey report noted: “These worries have intensified since 2022, when preparing the next generation and developing a shared vision were cited as priorities by 51 per cent and 24 per cent of families respectively.”

The appetite for sustainable investments is stronger in the Asia-Pacific than elsewhere. Only 6 per cent of respondents in the region lacked exposure to sustainable investing – the lowest among the regions.

The comparable figures were 27 per cent in EMEA, 25 per cent in Latin America, and 45 per cent in North America.