How Asia's wealthy invest
PUBLISHED ONDecember 13, 2016 10:00 PMByJulie Steinberg
HONG KONG-Asia's moneyed families are rising in the ranks of the world's richest people. And as their wealth grows, many are showing an investment style typically different from that of rich Western families, say some investment professionals who work closely with such families.
To help manage their investments, increasing numbers of the richest families around the world are turning to so-called family offices, private firms that manage everything from investments to tax and estate planning and philanthropy. But industry reports and sources who work closely with families who invest through such firms suggest that Asian family offices typically use more aggressive investment strategies than Western family offices, and want more direct involvement in the businesses they invest in.
A recent report from UBS Group AG and Campden Wealth points to data highlighting differences. According to the report, Asia-Pacific family offices in 2016 have allocated 38 per cent of their investment portfolios to direct venture-capital and private-equity deals, co-investing and real estate direct investment. North American family offices, by contrast, have allocated 27 per cent to those investments, the report says.
Interviews with family-office managers also suggest such differences. While private-equity funds are often a popular choice among the global wealthy, for example, Asian families tend to invest in them less because they are limited to a passive role, says Philippe Legrand, chief executive of London & Capital Asia Ltd., a Hong Kong-based family office that serves multiple families. Asia-Pacific family offices, on average, invested just 3 per cent of their portfolio in private-equity funds in 2016, according to the UBS and Campden Wealth report, compared with 8 per cent by North American family offices.
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