DBS aims for S$2 billion in multi-family office assets under management
It also sees more ultra-high-net-worth families committed to using their wealth as a ‘force for good’
[SINGAPORE] DBS Private Bank’s multi-family office (MFO) service has attracted S$1 billion in assets under management (AUM) from more than 25 ultra-high-net-worth (UHNW) families in two years since its launch in 2023.
Lee Woon Shiu, DBS Private Bank group head of wealth planning, family office and insurance solutions, is confident AUM under the DBS Multi Family Office Foundry VCC would hit S$2 billion by next year.
“It’s very promising, because the pipeline is there… We’ve seen a lot of traction in many markets we travel to. Many people have heard of VCC (variable capital company) in Singapore and want to understand more.”
In a statement, DBS said some families who have signed on were originally considering a single family office (SFO) but were persuaded by cost optimisation, manpower benefits and ease of administration which DBS MFO offers.
The cost of establishing and running SFOs in Singapore has risen since regulations were tightened in 2023, following a high-profile money laundering case involving S$3 billion in assets. In addition to broader due diligence checks, the processing time for tax incentives under the Monetary Authority of Singapore has also lengthened. All that is in addition to rising overhead costs, and the challenge of hiring qualified investment professionals.
DBS MFO claims to be the world’s first bank-backed MFO that leverages Singapore’s VCC structure. It is designed as a “plug-and-play” offering, where DBS will set up sub-funds which automatically benefit from the VCC’s tax incentives. Ongoing regulatory reporting requirements are also managed on the client’s behalf. The minimum asset threshold is S$15 million.
Elsewhere in the market, families may have to set up their own fund entities and apply separately for tax incentives.
DBS MFO does not impose any pre-determined investment philosophy, and clients are not required to invest in DBS products. Clients are free to customise their own investment strategies that are aligned with the family’s long-term vision. Capital is held and managed professionally by DBS.
Lee said: “While the traditional SFO model still appeals to many, we anticipated very early on that there would be growing demand for cost efficient yet institutionally supported solutions… Response has exceeded expectations.”
DBS claims to serve more than a third of SFOs established in Singapore.
“Client interest in succession planning and wealth preservation has intensified, and we’re currently in talks with more than 15 prospects who see DBS MFO as an attractive solution.
“With this in mind, we’re on track to double our AUM to S$2 billion by end-2026, achieving in just over half the time what it took to reach our first billion,” said Lee.
In its family office practice, the bank offers other structures such as family trusts, private trust companies and donor-advised funds to address wealth and legacy planning needs.
DBS said it has also seen more UHNW families committed to using their wealth as a “force for good”, either through impact investment or philanthropy. DBS MFO’s efforts will focus on “unlocking strategic structural advantages” for clients in priority markets such as Taiwan, Japan and the United Kingdom.
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