HOMEGROWN multifamily office AL Wealth Partners has been acquired by Nasdaq-listed AlTi Tiedemann Global, a development that is expected to enhance its advisory services for wealthy families.
AL Wealth Partners, founded in 2007 by former bankers Anthonia Hui and Leonardo Drago, was a pioneer in Singapore’s independent wealth management space. It has assets under management (AUM) of close to S$1.5 billion.
AlTi is an independent global wealth and asset manager, with assets under management and/or advisory of US$65 billion. Of these assets, wealth management’s share is US$43 billion, comprising investment advisory, trust and fiduciary, and family office services.
The balance of US$22 billion is in asset management, comprising an alternative investment platform, real estate assets and merchant banking.
Hui expects the merger to enrich the firm’s advisory services in terms of families’ philanthropic and impact objectives, which are seen as foundational for multi-generational wealth planning.
She added: “We realised that for us to continue to thrive alongside Singapore’s ambitions to be the leading wealth management centre, we need to have more dimensions than just asset management.
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“We have core clients who evolved from being just wealth owners. They seek purpose and a way to be socially connected. They want to build more cohesive relationships with their family members for generations to come.”
The family office space is a growing segment in Singapore’s wealth management sector. But even with wealth of US$100 million, families may well find the cost of running a single family office challenging, particularly if the office is staffed by professionals.
Hui reckoned the running cost in Singapore could be as high as US$2 million to US$3 million a year. “There are hurdles, costs, and a lot of human capital is needed,” she noted.
There are an estimated 700 family offices here, from around 80 in 2017. Independent asset managers, who emerged after the 2008 crisis, now typically call themselves multifamily offices, although their focus is mainly on investment advisory and portfolio management.
It was AlTi’s strength in the management of impact and philanthropic capital that drew Hui and Drago to the company. The couple, who are married, had been searching for an avenue for impact investments for their personal family funds. AlTi has committed around US$3.8 billion to impact strategies, and expects to grow this to US$25 billion by 2030.
To ensure alignment of interest, AlTi has some US$1.9 billion invested alongside clients. Hui said that she and Drago have also put “all our financial net worth’’ into the strategies and portfolios recommended to clients. “That has been our philosophy all along.’’
Robert Weeber, AlTi president for international wealth management, said: “Singapore’s commitment to a purpose-led approach to managing wealth very much mirrors our own. As an entrepreneurial business, we understand firsthand the challenges clients are encountering and how best to navigate these.”
He said AlTi has taken the approach of integrating environmental, social and governance (ESG) considerations, as well as the spectrum of purposeful investing – which spans impact, catalytic capital and philanthropy – into its overall advisory and wealth management practice.
He added: “Our impact and ESG teams are woven into the entire organisation. From the very start, we’ve taken the stance that they shouldn’t be a separate vertical, but should be integrated throughout our firm not only in the way we invest money, but also in the way we operate as a company.”
Broadly speaking, impact investing deploys capital for social and environmental objectives, and aims for “non-concessionary returns”. Philanthropy has zero expectation of returns. In the middle is catalytic capital, where investors are prepared to compromise on returns to achieve greater impact.
Weeber noted that multifamily offices tend to focus on portfolio advisory and investment, adding: “They tend to be incredibly investment-heavy – which I think is a losing battle, because you need to have a certain degree of scale and global reach to have global investment capabilities... Delivering a reasonable return should be a base level expectation of all of us. Where that’s not possible, smaller operations tend to focus more heavily on concierge and service-related things.”
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