The increase in the number of High Net Worth Individuals and Ultra-High Net Worth Individuals (HNWIs and UHNWIs) in the Asia-Pacific Region looks set to be followed by an expansion in the number of multi-family offices (MFOs) and single-family offices (SFOs) in the region. This is the conclusion of Credit Suisse, which recently held its first family office forum in Hong Kong and has launched a best practice guide to help HNWIs and UHNWIs to manage their assets.
In its Global Wealth Report for 2013, Credit Suisse estimated that a quarter of the world’s 34,000 UHNWIs (those with over $100m in assets) live in the Asia-Pacific Region. That’s 8,400 individuals with large assets that need to be properly managed. Yet only 3% of existing SFOs are currently located in the region.
Oracle Capital Group is among them. Having identified Asia as one of the major markets for the company’s long-term business development, the Oracle Capital is planning to set up Asia Advisory Board and the company’s Hong Kong Office will be opened soon as well.
Furthermore, the Chairman of Oracle Capital Group, Martin Graham, gave a Keynote Address to this year’s China Private Wealth Management Forum, which took place in Shanghai in June, speaking on the topic, The Family Office – the Key to Sustainable Family Wealth. Oracle Capital Group has identified as a key factor the growth in the number of HNWIs in China over the last five years. In 2012 China’s HNWI population grew by almost 10%, reaching 3.68m people, and wealth grew by 12.2% to US$12 trillion.
Credit Suisse, too, has seen the general growth of wealth and wealthy individuals in the region impact on its business. UHNWIs now represent 60% of the client base of Credit Suisse’ private banking in the Asia-Pacific Region.
One reason for the growth in SFOs is that the first and second generations of wealth creators are growing older and so the question of wealth preservation and transfer issues are becoming more acute. And it’s not simply a matter of passing on wealth. It is important for continuity, too, that values, principles and the art of running the family business are passed on and preserved for future generations.
This is an area where the single-family office can prove invaluable. Family businesses represent more than half of all listed companies throughout Asia. Over 60% of listed companies with more than a $50m market cap at the end of 2010 in Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore and Thailand were family businesses. “Keeping it in the family” has never been more important in Asia; and the family offices can help to maintain that.
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