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  • Family Offices in Singapore Growing in Quantity and Quality

    Family Offices in Singapore Growing in Quantity and Quality

    Family Offices in Singapore Growing in Quantity and Quality

    2022-11-30

    As part of our continuing series of articles, started last week with “It’s All in the Family Offices in Singapore” (https://finexhongkong.com/its-all-in-the-family-offices-in-singapore/) focused on Singapore’s rising family offices, we take a deeper dive into why there has been an explosion of both numbers and sophistication in these entities in the City State.

    With the increasingly uncertain macro-economic environment and geo-political unrest, coupled with global investors looking for improved market safe havens and attractive tax incentives, Singapore has emerged recently as a top location for establishing these family offices.  According to the Monetary Authority of Singapore (MAS), the number of family offices here jumped fivefold between 2017 and 2019, and almost doubled from 400 at the end of 2020 to 700 a year later.

    Earlier this year, the MAS announced stricter criteria around local investments, business spending and asset management for family offices to qualify for tax incentives.  These requirements by this regulator essentially hastened the need for increasing professionalism within the family offices as they will need to hire more full-time experts, invest in technology, risk management and governance.

    According to a Citi Private Bank’s Fang Ong’s recent article in the Business Times, “On top of that, we see three key trends – private capital markets, sustainable investing and philanthropy – to watch as the industry here is poised to develop further.”

    Ong continues further, “We expect increasing interest from family offices in exploring private deals, including private equity and private debt as well as investing in Series B and beyond plus pre-initial public offering (IPO) rounds, due to increased turmoil and volatility in public markets and higher uncertainty in a rising interest rate environment.”

    Moreover, she continues, “According to last year’s global family office survey by Citi Private Bank, the allocation to direct private equity and debt investments continues to increase substantially. Around 44 per cent of all family offices respondents reported that over 25 per cent of their portfolio was assigned to direct investments.”

    In previous generations, wealthy families also preferred to earmark wealth creation and philanthropy separately.  In recent times, with the passing of the proverbial leadership torch to their younger inheritors, a more holistic approach is being adopted to combine impact investing, namely ESG focus, with portfolio value creation.  Finex HK discussed the recent rise and change in ESG focus in our earlier article this year titled, “ESG Investing in SEA:  Is Green Turning Brown?” (https://finexhongkong.com/esg-investing-in-sea-is-green-turning-brown/)

    Ong again cites, “Results of a recent survey by the Family Office Association Hong Kong show that 85 per cent of family offices are expected to raise their allocation to ESG (environmental, social and governance) or impact investing. Among this group, 64 per cent expect an allocation increase of more than 10 per cent, with the remaining 36 per cent planning an allocation increase of over 20 per cent.”

    Clearly, it is becoming quite apparent that Singapore’s rising family offices will continue to evolve in their sheer numbers and sophistication in the coming years.  Many in the industry predict that this evolution will mirror the size and complexity seen in other more mature family office markets, like the US.

    Finex HK has one of the largest teams of 20+ associates dedicated to serving the family offices in Singapore and SEA markets.  We are actively working with both GPs and LPs to help raise capital in this rising market.

    Source: Faye Ong, “Singapore family office scene set to soar in sophistication”, The Business Times , August 24, 2022.

  • It’s All in the Family Offices in Singapore

    It’s All in the Family Offices in Singapore

    It’s All in The Family Offices in Singapore

    By Finex Product Team

     

    With Hong Kong’s increasing central governmental regulations and negative overall business sentiment arising from its Covid-related policies, Chinese HNWIs (High Net Worth Individuals) have migrated in large mass to its neighbour, Singapore, over the past few years. In fact, the number of new family offices established in Singapore had increased from the past three years from 27 to 2018 to 453 in 2021.  Currently, there are nearly 700 total family offices established in Singapore.

     

     

    Ultimately, these HNWIs’ priorities are on their personal and business succession plans and Singapore has emerged as the rising star of the region in the Asia private wealth market.  According to Rachel Yoo, counsel for Corey OIsen’s Trusts and Private Wealth Practice, “Their needs have extended from personal needs to family, corporate and social needs so they will have increased requirements for external advisory services and expect to have a one-stop shop experience.  For wealthy inheritors, we understand that they start with property and insurance, and then gradually expand to family trusts.”

     

     

    Yoo continued that often in Singapore, newly-rich Chinese NHWIs would look towards for this wealth management advice and structuring, particularly with the tax incentives and exemptions available to single family offices set up under Sections 130 and 13U of the Singapore Income Tax Act.

     

     

    Furthermore, adding further advantages are Singapore’s central location in Asia, modern infrastructure and business establishments, strong rule of law, sophisticated and highly-regulated, yet reasonable, financial market infrastructure with well-educated workforce combined with a high quality lifestyle.  One can see a myriad of reasons for more of these family offices moving here to open for business to cater to these HNWIs.

     

     

    Finex HK has one of the largest teams of 20+ associates dedicated to serving the family offices in Singapore and SEA markets.  We are actively working with both GPs and LPs to help raise capital in this rising market.

     

     

    Credit:  “Asian family office surge shows no sign of slowing down as Singapore attracts new business”, 25 July 2022 (Carey Olsen)neighbour

  • Hong Kong FinTech Week

    Hong Kong FinTech Week

    Hong Kong FinTech Week

    We had a fantastic time at the 2022 Hong Kong FinTech Week! An exciting platform that brought together FinTech founders, banking executives, VCs, regulators and fintech-savvy! Great insights and innovative ideas, pleasure to have met everyone there!

  •  Investment Promotion Week

     Investment Promotion Week

    Investment Promotion Week

    We enjoyed the Investment Promotion Week organized by Invest Hong KongNo doubt, there are a lot of new developments and shifts in the investment landscape recently, including virtual assets, ESG and impact investing among many other important factors. Nevertheless, Hong Kong is still an international financial center that still plays an important role in new initiatives, such as facilitating measures on promoting family offices in Hong Kong. Despite today’s high interest rates and volatile public market environments, alternative investments became more attractive for investors, namely data center and long-term student housing, with foreseeable potentials currently and in the coming years. 

  • SuperReturn Asia 2022

    SuperReturn Asia 2022

    SuperReturn Asia 2022

    Wonderful to attend SuperReturn Asia in Singapore this year and to be part of the celebration for the Singapore Office opening of Gulf Capital, as well as the SVCA’s 30th anniversary Gala & Award Dinner. 

    Always a pleasure to attend the biggest networking events to catch up with our peers from all around the world! The appetites are changing and evolving in the current economical environment, along with the alterations in the market landscape for long-term value creation.

    No doubt that we are all “Navigating Asia’s Changing Market Landscapes” and “Bridging West and East by finding the Fastest Growth Investment Corridor”, but the primary question remains to be where the next chosen market would be? Still China, SEA, or Indo-Asia? 

  • SVB Capital

    SVB Capital

    Finex and SVB Capital partnership

    We are thrilled to be working with SVB Capital. As the investment platform of SVB Financial Group which is dedicated to serving the innovation economy and entrepreneurs, SVB Capital offers powerful investing expertise and oversights tailored to the VC industry. The deeply interconnected investment platform provides LPs with access to the most innovative companies and fund managers. We are excited about this partnership and looking forward to great success!

  • Belt and Road Summit 2022

    Belt and Road Summit 2022

    Belt and Road Summit 2022

    There were fresh insights from last week’s Belt and Road Summit 2022 in Hong Kong! Plus, there were lots to explore under the Belt and Road initiative, which drives multilateral collaborations, such as the GBA and the RCEP. It was great to see our friends discussing frequent cross-border trades and potential investments within the region. Additionally, the Prime Minister of New Zealand, John Key, pointed out that we are facing some supply-chain challenges, which impacted global inflation.

    We believe it is now more critical than ever to re-fuel a strong economic recovery from the pandemic and create more opportunities in the Asia-Pacific, further from the globe.

  • Partnership between Growtheum Capital Partner and Finex!

    Partnership between Growtheum Capital Partner and Finex!

    Partnership between Growtheum Capital partners and Finex!

    We are thrilled to be working with Growtheum Capital Partners! Founded by the former leadership of GIC’s Direct Investment Group, Southeast Asia, Growtheum Capital Partners is a private equity firm targeting investments primarily in Southeast Asia. Growtheum aims for enduring partnership with founders and management to jointly generate sustainable value for all stakeholders. We are excited about this partnership and looking forward to great success!

  • AVCJ Singapore Conference 2022

    AVCJ Singapore Conference 2022

    AVCJ Singapore Conference 2022

    It was a great pleasure to attend the AVCJ Singapore Conference 2022. Given the global headwinds and the redirection of capital, we highly appreciated the opportunity to learn from our fellow colleagues in the industry about the trends and stimulation in the PE and VC investment allocations, specifically in the SEA region. 

    Always grateful to hear the fund managers’ inspirational insights on their unique strategies and interact with investors to learn their acumen in all asset classes. 

  • ESG Investing in SEA:  Is Green Turning Brown?

    ESG Investing in SEA:  Is Green Turning Brown?

    ESG Investing in SEA:  Is Green Turning Brown?

    Over recent times, many investors, both large institutions and small family offices, here in the SEA markets have focused not only generating high returns, but also using the ubiquitous ESG criteria for their investment guidelines.  If 2020 and 2021 can be considered banner years for sustainability investing, then 2022 is shaping up to be a year of the backlash against the ESG trend.  Has ESG’s growing “green” movement suddenly wilted to a brown hue of late?

    Why may one ask since ESG seems to have been adopted globally for properly-accepted, responsible investing in modern times?  A recent Moody’s report (May 2022) forecasts that green, social, sustainability and sustainability-linked (GSSS) bond issuance will be flat in 2022.  This can be largely attributed to the recent “green-washing” scandals and market headwinds of high inflation and interest rate hikes that has put ESG investing in the backburner of priorities of late.

    Furthermore, to add more damper to the ESG movement, the US Securities and Exchange Commission (SEC) fined a BNY Mellon unit US $1.5 million ($2 million) for misstatements and omissions about its environment, social and governance considerations this past May also.  These types of ESG standards manipulations will only weaken the fortitude of well-intentioned investors, especially among smaller family offices in Singapore, Hong Kong, and Taipei, who are already nervous about the increasingly volatile markets.

    “There’s a lot of pressure on investment managers to demonstrate the value that they’re getting out of their stewardship work,” said Peter Reali, managing director of responsible investment and engagement at Nuveen LLC, which oversees about $1.3 trillion. And when it comes to wider industry efforts to cut portfolio emissions, ESG investment professionals “definitely hear the complaints and concerns,” he said.

    Many investors around the globe are demanding more evidence that ESG asset managers can truly deliver on their returns, with a growing chorus, including the likes of Elon Musk, that complain the industry is not on the right track.

    Time will only tell if the ESG movement is truly here for long term as originally touted, but history has also proven that competing priorities of the greenback versus the green movement in ESG can not easily be determined among investors, especially within the ultimate verdicts from institutional investors and family offices in SEA.

    [1] https://www.bloomberg.com/news/articles/2022-05-31/esg-fund-clients-demand-proof-strategy-works-amid-backlash

    [2] https://www.theedgesingapore.com/news/environmental-social-and-governance/esg-investing-losing-steam-or-teething-problems