Singapore home to more than half of Asia’s family offices: report

MORE than half of the family offices in Asia are estimated to be located in Singapore, said KPMG Private Enterprise and family office consultancy Agreus in a report.

Some 9 per cent of the world’s family offices are located in Asia, of which 59 per cent are in Singapore, indicated the 2023 Global Family Office Compensation Benchmark Report.

The report estimated that there are around 20,000 family offices globally today. It noted that family offices have become accustomed to operating in times of uncertainty, and are quite uniform in their approach.

In the post-pandemic era, they have begun to review the affairs of the families they serve and put structures and relevant planning in place to protect wealth amid potential legislative changes and reputation management.

Family office CEOs in Asia have a wider range of take-home salary, earning between S$158,001 and S$500,000.

In the Americas, family office CEOs take home a salary ranging between US$198,001 and US$264,000.

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In Europe, the range is from 198,001 euros (S$291,2371) to 264,000 euros.

Most family offices in Asia have been in operation for 10 years or less, with 23 per cent of them in operation for two years or less. About 39 per cent of Asian family offices have operated for more than 10 years.

In comparison, family offices that have operated for more than 10 years account for 60 per cent in the Americas and 53 per cent in Europe.

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Asian family offices also mostly manage wealth for up to three generations, with 27 per cent for three generations, 38 per cent for two generations and 32 per cent for one generation.

In the Americas, 29 per cent of family offices manage wealth for three generations, 37 per cent for two generations and 23 per cent for one generation.

In Europe, three-quarters of family offices manage wealth for up to two generations, with 38 per cent for two generations and 37 per cent for one generation.

Twenty-four per cent Asian family offices have asset under management (AUM) of between S$500 million and S$1 billion – or between US$368.72 million and US$737.45 million – representing the largest AUM bracket for the region.

The other brackets – of AUM at S$1.1 billion to S$2 billion, S$251 million to S$500 million, and below S$250 million – each make up 20 per cent of Asian family offices.

In the Americas, 26 per cent of family offices have an AUM of below US$250 million, 21 per cent have AUM between US$251 million and US$500 million, and 17 per cent have AUM between US$500 million and US$1 billion.

But the Americas also has the largest proportion of family offices with AUM of more than US$5 billion, at 9 per cent. This is compared to 5 per cent in Europe, and 4 per in Asia, where these family offices have AUM of more than S$5 billion.

In Europe, 26 per cent of family offices have an AUM of below US$250 million, 23 per cent have an AUM of between US$251 million and US$500 million, and 20 per cent have AUM between US$500 million and US$1 billion.

Compared to the rest of the world, proportionately more Asian family offices also have ultimate beneficial owners whose roles are to oversee from the investment committee, at 32 per cent.

In comparison, the role to oversee from the investment committee makes up just 9 per cent of family offices in the Americas and 10 per cent of European family offices.

In the Americas and Europe, most ultimate beneficial owners either oversee the family office from the board – making up 26 per cent in the Americas and 28 per cent in Europe – or are CEOs or chairpersons of the family office – forming 51 per cent in the Americas and 42 per cent in Europe.

In Asia, 24 per cent of family offices have ultimate beneficial owners who oversee it from the board, and 32 per cent that have them as CEOs or chairpersons.

Looking ahead, the report expects 2023 to offer a glimmer of certainty due to the knowledge that a recession is likely. Family offices can plan for the outcome, and invest with the aim of considering every downfall as an opportunity.

In particular, private equity will be a “particularly interesting watch” after a decline during Covid-19.