Asian family offices are expecting growth in assets under management (AUM) and are planning to expand their teams, according to a recent report from Deloitte Private and Raffles Family Office. The report, based on a survey of over 354 single-family offices globally, found that 75% of Asian family offices expect an increase in AUM in 2024, with 84% anticipating an overall rise in family wealth.
Chi-man Kwan, CEO of Raffles Family Office, noted that there is a growing demand for professional services related to wealth and legacy planning, reflecting a trend toward greater professionalism among these offices.
The survey, conducted between September and December 2023, included responses from 89 Asia-Pacific family offices. These offices have an average global AUM of $2 billion, double the $1 billion average in Asia.
On the hiring front, 40% of family offices plan to add more staff this year, while nearly half will increase their reliance on outsourcing. Family offices are also turning to multi-family offices, fund houses, and private banks for support as they diversify their investments.
Kwan mentioned that the typical Asian family office employs around 5-10 people, fewer than the 10-15 staff typical in Europe and the U.S. Running costs for these offices range from $1 million to $2 million annually, making an AUM of at least $1 billion necessary for efficiency.
Recruiting remains challenging due to the smaller portfolios involved, even though compensation is competitive. Governance is also a key concern, with 67% of family offices prioritizing investment risk management. The report highlights that as the next generation takes on more independent roles, there is an increased risk of investment failures reflecting poorly on the main family office.
In 2023, family office portfolios heavily favoured equities, private equity, direct lending, real estate, and fixed income. For 2024, they plan to increase allocations to developed market equities and real estate. Asian family offices are also broadening their international investments, with 32% of portfolios now allocated globally, particularly in North America and the Middle East.
