Global Family Office Report 2015: Largest Family Office Research Study offers insight into Asia-Pacific Family Offices' Performance and Structures
Singapore/London, 15 October 2015 – Campden Wealth Research, in partnership with UBS, has today launched the Asia-Pacific insights from The Global Family Office Report 2015. The research surveyed principals and executives of 224 family offices globally (based in 37 different countries). Collectively, the participating family offices represented well over USD 200 billion in private wealth. In Asia Pacific, 35 family offices participated in the study with average assets under management of USD 431 million.
Second-best performers globally
Family offices in Asia-Pacific had the second-best investment performance globally in 2014, a return of 6.3% in dollar terms, down from 7.6% from 2013.
Family Offices in Singapore had substantially better returns, at 6.9%, this can be attributed to offices in the region having large holdings in private equity (over 30% of a Singaporean family office portfolio), which produced impressive returns over 2014.
The average Asia-Pacific family office holds 45% of their portfolio in illiquid assets (Singapore 46%) such as private equity and real estate direct investments, similar to offices globally. These figures are significantly higher than is seen in the portfolios of high net worth individuals.
One principal of an Asia-Pacific SFO (Single Family Office) stressed Asia-Pacific family offices need for control with regards to their private equity investments stating “We would rather take bets on ventures that we are involved with, because that’s a variable we can control. We can control the management, we can control what we build, we can control the quality, we can control the client service.”
Importance of intergenerational wealth management
The objectives of family offices remain unchanged. Families are primarily concerned with ensuring that the family offices facilitate intergenerational wealth management successfully.
Joseph Poon, Head of UHNW SEA, UBS Wealth Management said, "As Asian billionaire families grow in size and complexity, succession planning becomes increasingly important in creating a lasting family legacy. In Asia Pacific, many entrepreneurial families play a key role in contributing to the region's growing share of global wealth. Although the family office model is still in its infancy in this region, UBS continues to see increasing client interest in topics such as family business continuity, family decisionmaking, wealth structuring, philanthropy and the setting up of family office structures."
"We hope that this latest report by UBS and Campden Wealth will provide further insights to families and family offices in the region on how some of their peers in Asia-Pacific manage their wealth. As a market-leading global wealth manager, we are committed to working with families to preserve sustainable wealth through the generations, complementing the advisory and execution work of our Global Family Office and dedicated Family Services teams."
More cautious investment strategies
Despite these robust returns relative to their peers (family offices in Europe, North America and in Emerging Markets), offices in Asia-Pacific were more cautious in their investment strategies than the average family office in the study and are exhibiting a move away from growth-focussed investment strategies towards balanced and preservation strategies.
Investment strategies of | 2014 | 2015 |
Preservation | 17% | 19% |
Balanced | 50% | 54% |
Growth | 33% | 27% |
“Asia-Pacific family offices bucked the multi-year trend that has been seen globally towards more risk taking in investment strategies, and are taking a more cautious approach. This very much reflects the volatility seen in the market, and the economic uncertainties that prevail.” – commented Dominic Samuelson, Chief Executive Officer of Campden Wealth.
Costs are up in 2015
Relative to last year, costs have risen in the family office space. Those participating in 2014 and 2015 (multi-year participants, accounting for 45% of this year’s sample) said costs rose from 92 basis points to 99.
There are a number of factors driving costs. Most directly impacting costs this year is a willingness to take on staff or restructure, buoyed by the positive investment returns of previous years. This accounts UBS Group AG, News Release, 15 October 2015 Page 3 of 5 for the significant year-on-year rise in administrative costs from 15 to 24 basis points. A quarter of family offices said that within the last year the number of branches, location, or size (number of employees) of their family office changed. Asia-Pacific offices continue to have the highest total operating costs regionally at 115 basis points. Family Offices in Singapore reported slightly lower costs (113 basis points).
Philanthropic Giving
Fifty-five percent of family offices in Asia-Pacific are engaged in philanthropy through the family office. This is on the rise, with just under a fifth of family offices looking to set up philanthropic programmes within the next 18 months.
“The family offices in Singapore are actively engaged in philanthropy and give 2% of their total AUM. Health causes are particularly well supported by these family offices.” – explains Dominic Samuelson of Campden Wealth.
Notes to Editors
About family offices: A family office is, in its simplest form, the private office for a family of significant wealth. The number of staff working in the office can vary from one or two employees, to 20 or more staff, depending on the type and number of services it provides. The purpose of an office can range from handling key family assets and core holdings (tax and accountancy, property and estate management) to include more sophisticated wealth management structures, while often providing family members with educational, professional and lifestyle services.
Generally, family offices manage key areas of family assets, including real estate holdings and direct or indirect investments, tax consolidation and estate management, serving as the central hub for a family’s legacy, governance and succession communication.
About the research: The Global Family Office Report 2015 is the result of proprietary research undertaken with family office principals, executives and beneficiaries in Europe, North America, Asia-Pacific, the Middle East, Latin America and Africa in the spring of 2015. Participants completed an extensive questionnaire and offered insight during in-depth interviews, typically lasting an hour, conducted by members of the Campden Wealth Research team. Participants were family office principals and executives managing the assets of families with private wealth exceeding USD 100 million. Offices managing assets of significant value on behalf of more than one family are included in the study and comprise 30% of the sample. The study excluded multi-family offices that operate as financial intermediaries for retail clients, which are categorically different from traditional family offices. In addition to presenting cross-sectional analysis, where appropriate, the report makes use of longitudinal data compiled from the Global Family Office Report 2014.
Media contacts:
Campden Wealth: Stuart Rutherford/Dominic Samuelson
+ 44 (0)20 3763 2806
stuartrutherford@campdenwealth.com /dominicsamuelson@campdenwealth.com
UBS: Julie Yeo (+65 6495 5322) julie.yeo@ubs.com
Adeline Lee (+65 6495 8632) adeline.lee@ubs.com
About Campden Wealth
Campden Wealth is the leading independent provider of information, education and networking for generational family business owners, family offices and private investors globally in person, in print, via research and online.
Campden Research supplies market insight on key sector issues for its client community and their advisers and suppliers. Through in-depth studies and comprehensive methodologies, Campden Research provides unique and proprietary data and analysis based on primary sources.
Campden Wealth publishes the leading international business titles CampdenFB, aimed at members of familyowned companies in at least their second generation, and CampdenFO, the international magazine for family offices and private wealth advisers.
Campden Wealth owns the Institute for Private Investors (IPI), the pre-eminent membership network for private Investors in the United States and the Campden Club, a global membership network for families and family office executives. For more information, please visit: www.campdenwealth.com
Enquiries: research@campdenwealth.com
About UBS
UBS is committed to providing private, institutional and corporate clients worldwide, as well as retail clients in Switzerland, with superior financial advice and solutions while generating attractive and sustainable returns for shareholders. Its strategy centers on its Wealth Management and Wealth Management Americas businesses and its leading universal bank in Switzerland, complemented by its Global Asset Management business and its Investment Bank. These businesses share three key characteristics: they benefit from a strong competitive position in their targeted markets, are capital-efficient, and offer a superior structural growth and profitability outlook. UBS’s strategy builds on the strengths of all of its businesses and focuses its eff orts on areas in which it excels, while seeking to capitalise on the compelling growth prospects in the businesses and regions in which it operates. Capital strength is the foundation of its success. Headquartered in Zürich, Switzerland, UBS has offices in more than 50 countries, including all major financial centers, and approximately 60,000 employees. UBS Group AG is the holding company of the UBS Group. Under Swiss company law, UBS Group AG is organized as an Aktiengesellschaft, a corporation that has issued shares of common stock to investors. The operational structure of the Group comprises the Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Retail & Corporate, Global Asset Management and the Investment Bank.
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Wealth Management provides comprehensive financial services to wealthy private clients around the world – except those served by Wealth Management Americas. UBS is a global firm with global capabilities, and Wealth Management clients benefit from the full spectrum of UBS’s global resources, ranging from investment management solutions to wealth planning and corporate finance advice, as well as a wide range of specific offerings. Its guided architecture model gives clients access to a wide range of products from third-party providers that complement our own products.
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A joint venture between UBS’s Investment Bank and Wealth Management divisions, the Global Family Office Group focuses on servicing an exclusive wealth management clientele with institutional-like profiles and requirements. It offers holistic advisory services, direct access to UBS cross-divisional expertise across the globe, and institutional business opportunities and an extensive peer network with dedicated teams in New York, London, Zürich, Geneva, Hong Kong and Singapore. [London] – UBS Wealth Management and MPM Capital collaborate to push development for cancer cures.
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