Asian family offices eager to network on investments, operations
Family offices in Asia are open to connecting with peers to discuss investment opportunities as well as seek advice on other operational matters, a senior executive at a Thai family office said.
“The best investments have been with other families so I think there is some opportunity [for someone] to set up a network of family offices," Shiraz Poonevala, head of investments at Thailand-based GP Group, told AsianInvestor.
Families generally prefer to invest with another family than private equity, for instance, because the philosophies are quite similar, he noted.
“Having a network in which family offices are connected would be powerful and interesting to see."
ONGOING EFFORTS
Efforts to develop such networks are visible in markets across Asia.
Family offices are a relatively recent phenomenon, emerging only about a decade or so ago in the Asia Pacific.
In countries such as Singapore, the industry’s growth has been explosive over the past few years.
Collaborative management and preservation of family wealth for current and future generations is the primary reason why family offices are being set up in the Asia Pacific, a 2023 Family Office Survey by Campden Wealth and Raffles Family Office said.
Managing investment risk is the top governance priority for family offices in the region, it said.
Several family offices have expressed a desire to connect with counterparts within the country and outside as they seek to tackle issues ranging from the basics of launching a family office to planning for succession and mapping investment strategies to protect their wealth.
A database of family offices under some kind of association would be quite interesting, Poonevala noted, adding that private banks have proved quite useful in this regard as they host several family-office oriented events.
“People attend because they need to meet other families and peers. That’s how you network and can produce some successful results.”
Beyond private banks, family offices are taking the initiative to discover investment and other partnership opportunities themselves.
Many office family offices are comfortable making direct investments, often in partnership with like-minded peers.
A recent report highlighted this theme: “We are very comfortable investing directly in businesses, but it does take more effort. It means building an investment team to do due diligence and monitor investments, developing a network of co-investors, and creating a track record of successful investments,” a single-family office CEO based in Hong Kong was quoted as saying in the Campden Wealth and Raffles Family Office survey.
SEEING PROGRESS
That desire to come together, informally or under an association, has already delivered results in some markets.
The boom in single family offices in India led one veteran chief investment officer to set up a peer network to help wealthy families navigate everything from setting up an office to investing while separating business and family fortunes.
“The aim was to have the network help families with anything they needed – from vetting investment ideas to advice on setting up and managing a family office,” Jai Rupani, principal and chief investment officer of the Dinesh Hinduja family office, told AsianInvestor last year.
Rupani is founder of the single family office network called Aikya Connect.
The network was launched around 2021 and is a by-invite only investment network for senior investment professionals of single-family offices. It boasts more than 50 family offices with a cumulative investable corpus of about $25 billion.
In Hong Kong, single family office Tsangs Group set up a private and non-profit club to host exclusive gatherings for rich families and businesspeople globally, as part of a bid to promote Hong Kong’s strengths as a family office hub.
The family office also has an office in Dubai and Singapore to tap co-investment opportunities.
AsianInvestor understands that another prominent family office is developing an informal network of family offices within the city.
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Even as more wealthy families launch family offices, more jurisdictions are fighting for the prize of becoming the favoured jurisdiction to set up these structures.
Hong Kong, Singapore and Dubai are all in the race for Asia Pacific's family offices.
The rising influence of family offices can be felt across the investment landscape, especially in private markets.
“A few years ago, any fund raising would focus and attract only big institutional investors such as pension funds and insurers. Today, a significant portion of the money raised [for a private equity or credit fund] comes from family offices,” one alternatives specialist based in Singapore told AsianInvestor on condition of anonymity.
“You can’t afford to ignore them.”
Family offices are also playing a leading role in shaping philanthropy and impact investing trends in the region.
Poonevala will be speaking at AsianInvestor’s Thailand Investment Briefing in Bangkok on May 17. For more details, click here.