Asia Pacific Poised Be Top Investment Destination Family Offices Globally Ubs Report
According to the UBS Global Family Office Report 2024, Asia Pacific is poised to be the leading investment hub for family offices worldwide. The report, which surveyed 320 single family offices across seven regions with an average net worth of US$2.6 billion, revealed that family offices have continued to allocate their largest amounts of capital to North America (50%) and Western Europe (27%), with 17% allocated to Asia Pacific or Greater China.
Looking forward, investments in North America and Asia Pacific, excluding Greater China, will remain top priorities for family offices, with 38% and 35%, respectively, planning to increase allocations to these regions over the next five years.
“Nearly half of Asia Pacific family offices intend to allocate more assets to Asia Pacific in the next five years,” says Benjamin Cavalli, head of global wealth management strategic clients at UBS. The report also showed a shift towards a more balanced blend of bonds and equities in family office portfolios. Cavalli states that Asia Pacific family offices plan to add fixed income (48%), developed market equities (45%), private equity (24% in direct investments and 32% in funds), and hedge funds (31%) to their portfolios over the next five years.
He adds that private equity and hedge funds continue to be popular among family offices, as they offer diversification and attractive returns. Active management has also gained popularity, with 39% of family offices globally stating that they are placing more emphasis on manager selection and active management to diversify their portfolios, up 4% from 2023.
Located in the northern part of Singapore, Woodlands is a district that is poised for a major transformation. With the Urban Redevelopment Authority’s (URA) Master Plan in place, this area is set to become a vibrant and bustling hub. This plan aims to revitalize Woodlands Regional Centre, making it a key commercial and economic hub. Divided into two distinct precincts, namely Woodlands Central and Woodlands North Coast, this development is expected to breathe new life into the area. The ultimate goal is to attract businesses, create more job opportunities, and improve the overall living environment for residents. With the addition of the newly launched Norwood Grand Woodlands, the transformation of Woodlands is set to be even more remarkable.
The report also highlights generative artificial intelligence as the most popular investment theme, with 78% of family offices stating that they plan to invest in this area in the next two to three years. In Southeast Asia, specifically, 88% of family offices believe that positive US real interest rates will remain for a longer period. As a result, these family offices are increasingly relying on manager selection and active management to diversify (50%).
Compared to their global counterparts, family offices in Southeast Asia have the lowest average allocations to real estate, at 6%. Their top concerns for the next 12 years are a major geopolitical conflict and higher inflation, while higher taxes and climate change are the top concerns for the next five years.
Sustainability is also becoming an important consideration for family offices, affecting not only their investment portfolios but also the long-term outlook of their operating businesses. In Asia Pacific, 45% of family offices take philanthropy and charitable giving into account. Healthcare is a top theme for 59% of family offices in the region. Other popular sustainability themes include clean tech, green-tech, climate tech (40%), and philanthropy (39%). Asia Pacific family offices also focus on impact investing (36%), education (36%), and carbon markets/carbon capture and removal (21%) more than their counterparts globally.
The UBS Global Family Office Report 2024, which is in its fifth edition, was surveyed between January 18 and March 22.