Despite being the new kids on the block, Asian family offices have delivered higher investment performance in 2018, a study reveals.
By Shruti Advani, Guest Contributor finews.asia
Asia family offices clocked in an impressive 16.4 percent return last year – perhaps because of their penchant for higher-risk investments such as public and private equity. This outpaces the global family office average return of 15.5 percent last year, according to a report released by UBS and Campden Wealth Research.
Data for the report is collected from 311 family offices, with an average of $808 million in managed assets. Fifty-three of these are family offices based in Asia with an average asset size of $400 million – almost half of their global peers.
Asian Equities Bias
Despite concerns of a trade war brewing, equities in developing markets had a strong year – rising 14 percent – as did direct private equity investments – up 15 percent – with deal values reaching their highest levels since the first such survey five years ago.
Global family offices appear to be catching on to the Asian bias for equities, with average allocation at 28 percent in portfolios. Improved performance was also attributed to strength within the private equity space, which comprises over one-fifth of the average portfolio and delivered returns of 18 percent last year.
Asia Dealmaking
«For the first time since we have been analyzing this data, Asia has led the way on performance, benefiting from a relatively high exposure to developing market equities and the high number of private equity deals in the region,» UBS family office head in Asia, Anurag Mahesh, said.
«This is reflective of what we are seeing in our Asia-Pacific family offices as well since they are increasingly interested in private equity deals. Some of the sectors that they are interested include technology, healthcare and education sectors.»
Handing Over
Contrary to popular perception, succession planning is a key priority for the region’s family offices - 71 percent either have succession plans in place or are currently working on one. «As most of Asian wealth are first generation, there is a higher expectation in this region that the next generation will take control over the family office,» explains Mahesh.
«They participate by joining the board, assuming management or executive roles, undertake different projects for the family offices or are involved in philanthropic activities.»
