{"id":7331,"date":"2024-03-31T17:22:42","date_gmt":"2024-03-31T09:22:42","guid":{"rendered":"https:\/\/mpl.hk\/?p=7331"},"modified":"2024-04-09T17:25:03","modified_gmt":"2024-04-09T09:25:03","slug":"q1-in-review-the-trending-topics-that-affect-family-offices","status":"publish","type":"post","link":"https:\/\/mpl.hk\/q1-in-review-the-trending-topics-that-affect-family-offices\/","title":{"rendered":"Q1 In Review: The Trending Topics That Affect Family Offices"},"content":{"rendered":"
It\u2019s contrived to say, but 2024 is unfolding rapidly – and reviewing the start of the year, the saying\u00a0\u2018journalism is the first rough draft of history\u2019<\/em>\u00a0comes to mind.<\/p>\n Looking into the major news headlines of the first quarter of the year, the family office market has lost none of its pace. Monitoring services have picked up on 130 significant articles from major news platforms on the topic of family offices, and the changes that affect them.<\/p>\n Diving into this realm, it\u2019s interesting to see which themes have taken the limelight, which are recurring, and which have only just made their first breakthrough – and an examination of each headline reveals new insights into how we might expect family offices to adapt and thrive over the course of the year.<\/p>\n Across the 130 provided headlines, Hong Kong and Singapore dominated stories both Asian, European, and US-based newsrooms.<\/p>\n That\u2019s perhaps unsurprising with the news that a recent market study estimated that there are around\u00a02,700 single-family offices based in Hong Kong<\/a>. Some of the difficulty in quantifying that number lends itself to the debate as to what is actually considered a family office – an alternative number posits that just\u00a0400<\/a>\u00a0single family offices exist in Hong Kong instead.<\/p>\n Nevertheless, both Hong Kong and Singapore have tussled to attract family offices to take up residency in their respective jurisdictions. While Singapore has 1100 family offices that are officially\u00a0registered with MAS<\/a>, Hong Kong\u2019s government has launched initiatives such as\u00a0Impact Link<\/a>\u00a0(a charitable initiative) in its bid to become a global family office hub.<\/p>\n The regional rivalry doesn\u2019t end in the east, Dubai and the UAE are also making a strong \u201cnew-world\u201d play at attracting new family offices. We\u2019ll likely continue to see further competitiveness in the market, as family offices seek new and enticing jurisdictions to root themselves in.<\/p>\n To reference the debate over what actually constitutes a family office, we\u2019ve seen financial institutions make several moves to cater their services for this segment and more appropriately assign hires and human resources to servicing the UHNWI market best.<\/p>\n An article from\u00a0Global Finance<\/a>\u00a0perhaps sums it best –\u00a0\u201ca $72 trillion global avalanche of inheritance is coming. Are private banks and wealth managers up to meeting the next generation\u2019s needs?\u201d<\/em><\/p>\n JP Morgan fired a first salvo in 2023 by adding UNHW and family office services to its roster – and this year, we\u2019ve noted stories such as\u00a0Citi Private Bank<\/a>\u00a0hiring UBS\u2019 Richard Weintraub to lead its own family office group, while corporate venture studios such as\u00a0xcube<\/a>\u00a0have even launched its own Corporate Venture Portfolio Equities, aimed at family offices and UHNWIs.<\/p>\n The race is on – and the time is now for more financial institutions to prepare for the shifts ahead.<\/p>\n A consistent theme in this quarter has been the allure of private credit – with one study by\u00a0Hedgeweek<\/a>\u00a0noting that six in 10 family offices are looking to increase their exposure to private credit in 2024.<\/p>\n A number of other reports have similarly noted this finding – including\u00a0Campden Wealth\u2019s 2023 European Family Office Report<\/a>\u00a0citing that family offices were planning to increase their alternatives allocation over the following 12 months.<\/p>\n The finding isn\u2019t just local to Europe, however – Asian Investor noted that family offices are driving a\u00a0new private credit boom<\/a>, while KKR\u2019s family office survey of 75 chief investment officers noted that 52% of their portfolios invested in alternative investments – including private credit.<\/p>\n While Singapore and Hong Kong may have stolen the limelight, we\u2019ve similarly noticed other international jurisdictions compete to draw family offices to take up residency.<\/p>\n For example, Malaysia\u2019s government is\u00a0actively developing new regulatory frameworks<\/a>\u00a0to attracting family offices, while Bermuda\u2019s Minister of Economy and Labour\u00a0recently introduced<\/a>\u00a0Bermuda\u2019s new framework of solutions for family offices.<\/p>\n A broader pattern emerges looking at the interest of private banks, financial institutions, and even jurisdictions changing pattern to accommodate wealth transfer\u00a0from regions such as the Middle East<\/a>\u00a0– with governments and regulators seeking to unveil bespoke legislation to entice family offices.<\/p>\n Looking over recent headlines, I\u2019m reminded of an outtake from Simple\u2019s\u00a02024 Outlook for Family Offices<\/a>\u00a0– that new shifts will place \u201ca greater emphasis on [Family Offices] proactively managing portfolios to ensure they\u2019re diversified enough to offset long-term uncertainties.\u201d<\/em><\/p>\n Across themes from Asia\u2019s early dominance in attracting new family offices, revised legislation to attract the residency of UHNWIs, to new financial service offerings, and the allure of alternative investments, it feels as if the broader market sector is drawing breath in anticipation of greater change to come.<\/p>\n What will the rest of 2024 bring? Only time – and news headlines – will tell.<\/p>\nHong Kong and Singapore Lead A Family Office Renaissance<\/h2>\n
Financial Institutions Revealed Bespoke Wealth Management Operations<\/h2>\n
Family Offices Are Drawn To Private Credit<\/h2>\n
New Regulation And Compliance<\/h2>\n
An Outlook For The Rest Of 2024<\/h2>\n