Singapore (pictured) and Hong Kong are moving rapidly to attract resident family offices. … [+]
It may sound artificial, but 2024 is unfolding rapidly – and as we look back at the beginning of the year, there are these words: “Journalism is the first draft of history” comes to mind.
A look at the major news headlines from the first quarter of this year shows that the family office market hasn't lost any pace. The watchdog service featured 130 important articles from major news platforms about family offices and the changes affecting them.
As we dive into this area, it's interesting to see which themes are in the spotlight, which ones come up again and again, and which ones are just making their breakthrough for the first time. And examining each headline reveals new insights into how family offices are expected to adapt and thrive. Throughout the year.
Hong Kong and Singapore lead family office renaissance
Of the 130 headlines provided, Hong Kong and Singapore dominated coverage in newsrooms based in Asia, Europe, and the United States.
That may not be surprising given the news that a recent market study estimates that there are approximately 2,700 single-family offices based in Hong Kong. Part of the difficulty in quantifying this number lends itself to the discussion of what actually qualifies as a family office. Another figure assumes that there are only 400 single family offices in Hong Kong.
Nevertheless, both Hong Kong and Singapore are struggling to attract family offices to reside within their respective jurisdictions. Although Singapore has 1,100 family offices officially registered with MAS, the Hong Kong government has implemented initiatives such as Impact Link to become a global family office hub. It's starting.
Regional rivalries are not limited to the east, with Dubai and the UAE also deploying strong “new world” strategies to attract new family offices. We expect the market to continue to see more competition as family offices seek to establish roots in new and attractive jurisdictions.
Financial institution reveals tailored wealth management operations
Referring to the discussion of what actually constitutes a family office, there are several ways for financial institutions to cater to this segment and better allocate hiring and talent to best serve the UHNWI market. I've seen this move in action.
The Global Finance article probably says it best – “A $72 trillion global avalanche of inherited wealth is on the horizon. Are private banks and wealth managers ready to meet the needs of the next generation?”
JPMorgan fired its first salvo in 2023 by adding UNHW and Family Office Services to its roster. And this year, we focused on news such as Citi Private Bank hiring UBS's Richard Weintraub to lead its family office group, while corporate venture studios such as xcube are targeting family offices and ultra-high-net-worth individuals. We are launching our own corporate venture portfolio stocks.
Competition continues, and it's time for more financial institutions to prepare for the changes ahead.
Family offices gravitate towards private credit
A consistent theme this quarter has been the appeal of private credit, with one Hedgeweek survey finding that 6 in 10 family offices are considering increasing their exposure to private credit in 2024. Masu.
A number of other reports have noted this finding as well, including Camden Wealth's European Family Office 2023 report, which cited that family offices plan to increase their allocation of alternatives over the next 12 months. Reports are also included.
However, this finding is not unique to Europe. Asian Investors points out that family offices are driving the new private credit boom, while a KKR family office survey of 75 chief investment officers found that 52% of their portfolios are private. He pointed out that he invests in alternative investments, including: credit.
New regulations and compliance
While Singapore and Hong Kong may be in the spotlight, we have noticed that other international jurisdictions are competing to recruit family offices for residency as well.
For example, the Malaysian government is actively developing a new regulatory framework to attract family offices, and Bermuda's Minister of Economy, Labor and Welfare recently introduced a new framework for solutions for family offices in Bermuda.
Private banks, financial institutions, and even more concerned about changes in jurisdictions where governments and regulators are announcing bespoke legislation to attract family offices to accommodate the transfer of wealth from regions such as the Middle East. A broader pattern emerges.
Outlook for the rest of 2024
Recent headlines remind me of an excerpt from Simple's 2024 Outlook for Family Offices. “There will be a new shift.”put more emphasis on [Family Offices] Actively manage your portfolio to ensure you have enough diversification to offset long-term uncertainty. ”
Across themes ranging from Asia's early advantage in attracting new family offices, legal changes to attract ultra-high-net-worth residents, new financial service offerings, and the appeal of alternative investments, a broader range of market sectors are becoming more Coming that feels like you are holding your breath in anticipation of change.
What will happen for the rest of 2024? Only time and the news headlines will tell.
