Asia is undergoing a major intergenerational wealth transfer. This process includes handing over the reins of the family office but they lack confidence in the leadership of the next generation, according to a report by Deloitte and Raffles Family Office.
Nearly seven in 10 respondents (69 percent) expect the next generation to lead their family office in Asia Pacific post-succession, according to a report by Deloitte Private and Raffles Family Office.
This year, they are already taking leadership roles such as CEO (38 percent), board member (36 percent), manager/executive (30 percent), or director (21 percent). However, there is a shortage of confidence due to their lack of qualifications (36 percent) and insufficient interest in the activities of the family office (23 percent).
As a result, 33 percent say the core priority for the next generation in 2024 is to receive mentoring or training, while 26 percent say it is to plan for succession. In addition, 43 percent aim to shift toward more professional, non-family staff in 2024 with 31 percent claiming to rely on an external professional to lead the family office.
Investment Outlook
In terms of investments, APAC family offices were optimistic about their future with more than three-quarters (77 percent) expecting to see their assets under management (AUM) grow in 2024 alongside 84 percent anticipating an increase in family wealth.
In light of the positive outlook, 43 percent are looking to hire additional staff and 38 percent plan to increase the number of services offered while 48 percent will rely further on outsourcing services to a third party.
Asset Class Focus
The top asset classes invested were equities (25 percent), private equity and direct lending (21 percent), real estate (19 percent) and fixed income (19 percent) in 2023, which accounted for 84 percent of the variegate family office portfolio.
In 2024, equities (32 percent) and real estate (31 percent) will be the top asset classes targeted for increased allocations. In addition to a 32 percent average allocation to investments outside of their home region, APAC family offices will also target more investments in North America (23 percent) and the Middle East (23 percent).
Top Market Risks
The top three perceived market risks in 2024 are a potential global recession (as agreed by 73 percent of respondents), geopolitics (55 percent) and inflation (44 percent). 67 percent also named investment risk management as a top priority this year, followed by investment governance and valuation policies (53 percent).
The report entitled «The Family Office Insight Series—Asia Pacific Edition» is based on a survey of 89 family offices from APAC from September to December 2023 alongside 15 in-depth interviews with senior family office executives in the region. The family offices have an average AUM of $1 billion and an average family wealth of $2.1 billion.
