Amidst the volatile market situation, risk management has been a very strong discussion point for family offices. And it is very important because speed becomes an essence.

Today, people are realizing that speed is very important. «Because within two or three days, a large institution can disappear,» said Hemant Tucker, co-Founder and CEO of Singapore-based multi-family office Farro Capital in an interview with finews.asia. That is why an independent person is needed to analyze counterparty risk on an ongoing basis.

Nowadays, there are enough indicators in the market to see that something could potentially go wrong. And multi-family offices are playing an important role in a comprehensive solution, he added. Still, investment remains the bread and butter that wealthy families require from multi-family office services. Other parts include family governance, tax planning, philanthropy and impact investing as well as strategic inputs on their operating businesses, co-founder Manish Tibrewal said.

Unpredictable Situation

In the unpredictable market situation, Farro Capital advises its clients to be more defensive although it will also be based on each family’s goal, said Tucker. A lot of these families want wealth preservation rather than doubling their money every year. « Different families are at different stages of their journey…we’re advising clients to be more cautious, defensive, adopt a no leverage approach ,» Tibrewal added.

Options for Hong Kong Expansion

Based in Singapore which attracts more money inflows, Farro Capital is still keeping options to look for Hong Kong expansion. «It depends on clients and clients’ needs. We are more client-focused, we will keep all our options open based on what the clients’ needs are,» Tucker said.

Farro Capital is also providing what the single family office needs, as they may not have expertise in some areas such as family governance, family policies or philanthropy. «Based on what the missing link is, we try and step into, to support that missing link,» co-founder and managing partner Mahesh Kumar added.

Singapore for Deals

With the recently increased requirements from the new global investment program (GIP), Singapore still attracts more money inflows. «There is already high interest,» said Tibrewal. The Singapore government indeed wants more exposure from global investors. «And they know that family offices are a good way to achieve that because family offices are a very long-term kind of capital. The money comes in and it stays on,» Kumar said.

Apart from being a major financial center, Singapore is also a home for deals that are happening. «And for these family offices, they want to tap into this, this whole ecosystem,» he added.

Advising Clients to Move to Safer Banks

On the other hand, the recent collapse of global banks also brings effect to the Singapore market and so is Farro Capital. «We are advising clients on new ways to move to safer banks if they're not already doing so,» said Tibrewal. Singaporean banks are a lot more suited from a risk management and perception perspective. The Monetary Authority of Singapore (MAS) has been proactive in providing statements related to the global situation, like the Credit Suisse and UBS case.

Farro Capital has just started at the end of 2022, so it will continue to expand to a 20 member team by the end of 2023. «We're looking to add more headcount with corporate and investment banking expertise,» Tucker said, adding that it needs expertise in arranging home loans, making portfolios ESG compliant, negotiating bank fees and sourcing deals.

Huge Pipeline of People

Currently, Farro Capital has a huge pipeline of people who want to join, making finding suitable talents less challenging for them. Those from different countries and with different expertise are among those needed. The firm has been on track to increase its asset under management in the next 18-24 months to a total $1.5 billion with 50 more families, each with an average contribution of $30 million in AUM. It has recorded more than $1 billion assets under management so far.

Farro is a 5,000 years old grain that still exists today. The story is in line with Farro Capital’s idea to keep multi-generational prosperity. «It signifies longevity, having survived for thousands of years, prosperity, civilization, and sustainability,» Tibrewal explained.