Go East: Singapore's family office boom - Spear's Magazine

Go East: Singapore’s family office boom

Go East: Singapore’s family office boom

Family offices are flocking to Singapore thanks to a concerted effort by government to court global wealth and capitalise on growing UHNW interest towards Asian markets

Family offices are fast becoming the favoured method of administering and managing UHNW wealth. There are now an estimated 7,300 single family offices (SFOs) worldwide – a 38 per cent rise since 2017, according to research by Campden Wealth.

That’s higher than the number of billionaires worldwide (2,043). As this number continues to rise – and there is no reason to think it will stop – countries are seizing on their economic potential. Singapore might have latched onto the trend with more determination than anywhere else. According to the Monetary Authority of Singapore, assets managed by SFOs in the city-state have risen an estimated five-fold from 2017 to 2019.

Last October, the country’s senior minister Tharman Shanmugaratnam said that there were around 200 SFOs in Singapore managing assets ‘in excess’ of $100 million. At the beginning of 2021, website Family Capital found that 229 family offices had registered in the jurisdiction since 2020.

Not bad for a city-state with a population smaller than London’s. Singapore has become something of a hotspot for Western wealth, too. Google co-founder Sergey Brin – the ninth richest person in the world – became the latest high-profile figure to announce he was setting up an SFO in the Lion City, joining recent additions such as Ray Dalio and Sir James Dyson.

This agglomeration is no accident, but rather a result of a concerted effort by government to court global wealth and capitalise on growing UHNW interest towards Asian markets.

In its inaugural family office report last year, BlackRock found that 60 per cent of family o ces intended to increase Asian exposure compared with 42 per cent for North America.

As well as its geographical positioning, political stability, low taxes and a transparent regime, Singapore is an ideal cultural fit for western UHNWs, says Wendy Sim, managing director at Singapore-based global expansion, active wealth and funds specialist ZEDRA, which works with wealthy families.

‘In Singapore you can connect the East to the West,’ she says. ‘Connecting to the West is easy but also then having the language skills to deal with all the Asian markets makes a di erence for us.’

Last January, Singapore introduced the Variable Capital Company (VCC) corporate structure to attract assets of fund managers and family offices. Hailed as a ‘potential game changer for the fund management industry’ by PwC, it provides cost-savings and operational flexibility for fund managers and investors.

As of 31 January 2021, more than 200 VCCs or sub-funds had already been incorporated. The government also expanded its citizenship-by-investment programme for global investors in March 2020 to include next-generation business owners, founders of fast-growth companies, as well as UHNWs looking to set up an SFO, where individuals can invest in a new or existing family office based in the jurisdiction.

The country aims to become the ‘go to’ wealth management hub in Asia, Lim notes. As well as these policy tools, the government is launching training grants to support practitioners and is inviting family offices to events where they can network and co-invest. ‘It’s quite an interesting ecosystem,’ she adds.

Four Singapore-based family offices

Dalio Family Office
Bridgewater founder Ray Dalio’s family office announced in November that it was time to have a physical presence in Asia after decades building relationships in the region

Vulcan Capital
The family office of late Microsoft founder Paul Allen launched its Singapore office in 2019 with the expectation that it would triple its exposure to Asia-Pacific private equity

Weybourne Group Ltd
James Dyson’s family office incorporated in Singapore in September 2019 after the vacuum tycoon controversially decided to relocate his fi rm’s head office to the city state.

Sunrise Capital Management
Chinese-Singaporean couple Shu Ping ($14.6bn net worth) and Zhang Yong ($26bn net worth) scored a major coup for Singapore when they opened their family office.

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