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Both the concept and practice of creating family offices to manage the wealth of ultra-high-net-worth (UHNW) families
around the globe are increasing dramatically, and Asia is at the forefront of this rapid growth.
The rising interest and activity in the family office space are creating great dynamism in this segment of wealth
management, causing all sorts of advisors and investment solutions providers to reposition their businesses and their
range of services to cater to what is a remarkable rise in the number and the scale of family offices.
Indeed, so significant are the changes taking place in the way in which the world's super-wealthy families approach their
wealth management and structuring, and of course the longevity of their family dynasties, that the family office space
has moved centre-stage in the global wealth management industry.
There are clearly far-reaching choices to be made by these families, and the greater their wealth, the easier the decision
as to the type of family office preferred. For those UHNW families holding financial asset wealth of at least USD100
million, the directly controlled SFO is often the preferred route, and even more so if their assets go into the hundreds
of millions of dollars.
For the smaller UHNW families - perhaps with financial assets of USD20 million to USD100 million, and sometimes beyond,
they are increasingly choosing to allocate their assets to the growing ranks of professional MFO operators.
Whether the SFO or the MFO route is taken, the objectives are similar - namely greater control and professionalisation
of family wealth, much-enhanced coordination and communication amongst family members, and the ability to more
effectively manage estate transition amongst the generations, and preserve wealth within the family unit, rather than
risk what can often be a gradual dispersion, possibly erosion, of that wealth.
According to data released in late July this year by Campden Research in association with UBS in their Global Family
Office Report 2019, the total estimated assets under management of family offices stands at USD5.9 trillion globally,
while the wealth of the families behind them totals a truly vast USD9.4 trillion.
The research estimated that there are 7,300 single-family offices worldwide, up a remarkable 38% from 2017. While
42% are in North America and 32% are located in Europe, Asia Pacific is catching up fast and now has an estimated 1300
such family offices, according to Campden, up an impressive 44% since 2017.
The report highlights how the surge in family offices came largely after 2000, with Campden noting that 68% of the 360
family offices it surveyed were founded since that date. Campden also highlighted how the SFOs and MFOs involved in
their research manage wealth generally in the hundreds of millions of dollars and usually well over USD1 billion for the
SFOs, resulting in an average amongst the 360 family offices surveyed of around USD916 million each.
Asia is already the world's top region for billionaires. The 2019 Wealth Report released by London-based real estate agency
and consultancy Knight Frank reported that the region's estimated 787 billionaires was far in excess of the 452 in Europe
and 631 in North America. And the report predicted that this number would very probably balloon to above 1,000 in the
next five years out of a worldwide billionaire population Knight Frank expects to reach 2,696 within that time frame.
Within Asia, a large proportion of these billionaires are still in the first generation, meaning that Asia is at the crest of a
significant wave of intergenerational wealth transfer, representing literally trillions of dollars. As that vast wealth moves to
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