Apac Family Office Report 2012


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Apac Family Office Report 2012

  1. 1. The Production of wealth is not the work of any one man and the acquisition ofgreat fortune is not possible without the co-operation of multitudes of men.- Peter CooperAs global growth expectations sway between exuberance and gloom, the performance of anyinvestment portfolio is put to the test. While the US hails the end of quantitative easing to thedisappointment of market players, fears in Europe have been dampened by sufficient short-termfinancing. Asian markets continue to correlate with China and Japan, impacted by mixed signals abouteconomic potential. The bulls and bears divide is far from over, and it is evident that the worldhas not stabilized yet. In a persistently complex environment, family offices have to prepare to be faston their feet in order to protect their wealth. HNWIs cannot afford to keep their assets idle and exposethemselves to the risk of losses. It will take a prudent eye to single out real opportunities in the troubledEurozone, the emerging economies of Asia or the US market as it inches its way through recovery.Wealthy investors must acquire genius affinity in picking investments and side with those assetmanagers who can deliver stable robust returns.
  2. 2. In 2012 we worked with 83 family offices in Asia, which were a Mix of Single-Family Offices, Multi-FamilyOffices, Trust’s & Business Conglomerates. Although Family offices represented the whole of Asia Pacific,the majority were from Hong Kong, Singapore & China. Trust & 2 2 1 Australia Foundation 2 China 20 10 Business Hong Kong 2 conglomerate India 3 Malaysia Single-family 1 31 office Singapore 42 Taiwan Multi-Family 48 Thailand Office
  3. 3.  The Cumulative AUM of 83 family offices stood Family Offices at over $50bn(Approx).50 41  The minimum AUM for a Family Office to work40 with us was $100mn. 2630  When segregating the Family Offices on the basis of AUM of 83 investors,20 41 had AUM b/w $100mn-$500mn, 26 F.O’s had min. $100mn, 6 F.O’s held 6 610 AUM b/w $500mn-$1bn & above $1bn each & 3 1 1 had over $40bn. 0
  4. 4. Equity Products Based on the asset allocation strategies provided by these family offices for the next 6-18 months Mutual Funds we have identified that among the traditional Asset classes, we saw a considerable interest 9 Fixed Income & in Equity & Fixed Income Products, which were 3 28 Money Market requested by 28 & 25 Family offices respectively, 9 followed by Bonds which were requested by 17 Bonds & Mutual Funds by 6.17 6 Currency Family Offices indicated that Currency Management(9), 25 Management Portfolio Performance(9) & Risk Management(3) also as one of their key priorities. Risk Management Portfolio Management Monitoring
  5. 5. Preferred Alternatives Hedge Funds 27 Commodities /Managed In the alternative space we see Asian Family Futures 18 Offices being more aggressive in allocating Absolute Return assets in alternative strategies as compared to 17 Venture Capital institutional investors. 10 Real Estate 26 The fig. alongside displays the number of investors requesting different alternative asset Private Equity 40 classes indicating that Private Equity was aInfrastructure Investments 17 preferred strategy for most of the investors, which we see was specified by 40 investors Fund of Funds 9 Hedge Funds by 27, Real Estate by 26 & 21 Emerging Market Family Offices mentioned Emerging Market 21 Funds among others. 0 20 40 60
  6. 6. Unlike in the recent past, Asian investors have Other Alternative Strategiesshown interest in allocating their assets to otherniche alternative strategies as a part of their overallPortfolio diversification, and this is quite evident Distressedas 11 family offices were looking for Distressed InvestmentsInvestments & ETF’s each. ILS & PassionInvestments were specified by 4 & 3 F.O.’s 4 3 11 Exchange- Traded FundsWhen comparing with European & North American 11 Insurance-Family Offices who have been investing in these linkedniche asset classes over several years. Although Productsthere is tremendous potential for these asset classes Passion Investments & in Asia, however significant promotion & education Collectiblesneeds to be done in order for it to acquire aposition in the portfolios of Asian Family Offices.
  7. 7. Energy & Forestry For the sustainability of any economy Energy has always been a key aspect for growth & so is the case in Asia which is home to 2 of the worlds fastest growing economies namely China & India. Energy Considering the importance of energy (traditional 11 13 & alternative) for growth, Family Offices have Farmland/Forestry/ identified it to be an attractive alternative investment Agriculture 7 sector. Renewables & Cleantech Investments in Agriculture & Forestry have been gaining lot of attraction from Family Offices because of its non Correlation to volatile markets.
  8. 8.  When asked about their geographical Geographical preferences for their future investments in the Preferences next 6-18 months 41 investors specified their Asia interest to continue investments in their own 42 region while actively seeking attractive 25 Europe investment opportunities overseas. 21 34  25 Family Offices are pursuing investment North opportunities in the Pacific, 21 in North 43 America America, 15 in Europe, 4 in Latin America & 2 Latin in Africa specifically.15 America  Apart from continental bifurcation, 34 Family Africa Offices were looking at Global opportunities. Australia