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Rich Asians crazy about securing wealth spark family office boom in Hong Kong, Singapore

Reuters  |  HONG KONG 

By Sumeet Chatterjee

HONG KONG (Reuters) - Rich Chinese and other Asians are increasingly seeking more control of their wealth, driving a rapid rise in the number of so-called family offices, or private investment vehicles, being set up in Hong Kong and

As the wealthy target greater investment diversification and as business owners hand over the reins to successors, family offices are sprouting in the Asian financial hubs, taking advantage of incentives such as tax breaks and residency being offered.

The is a relatively new concept in Asia, with less than 500 such entities, compared to thousands in the West. There is no precise number available, given the private ownership structure and secrecy around these businesses.

They offer a one-stop solution to managing the wealth of the rich, including investments, charitable giving, taxation and wealth transfer. Staffed by bankers, fund managers, lawyers and tax practitioners, some even provide overseas private schooling and travel arrangements as

The rich are favouring family offices as they get personalised attention and are able to have a bigger say in their wealth management.

"This year the activity for setting up family offices is definitely more," said Lee Wong, Swiss Asia's head of "The growth of family offices in should continue on its current trajectory."

Pacific had 814 billionaires at end-2017, accounting for 38 percent of the global billionaire population, with minting two new billionaires every week, a report by and said last month.

That momentum was aided by the boom in Hong Kong for initial public offerings which saw a record $27.7 billion raised in the first nine months of 2017 mostly by Chinese tech firms, turning many founders into millionaires and billionaires.

Six private bankers on average estimated the number of new family offices in had risen 15 percent in the first three quarters of this year over the year-ago period. This could pick up pace with a worldwide wealth transition of $3.4 trillion expected over the next two decades, as per the UBS/report.


Asian family offices are evolving from being just investment focused to offering a platform for dispute resolution and succession planning, as the new generation in the family-owned businesses expand into newer areas, bankers said.

Buoyed by the growth prospects, units of global firms including Citigroup, Credit Suisse, HSBC, and are looking to expand services, headhunters and bankers said.

Stephen Campbell, chairman of the global group at Citi Private Bank, which serves over 1,500 family offices globally, said the had seen "dramatic growth" in the number of its clients, including in Asia.

Citi plans to make a new Hong Kong-based hire in its family offices team, he said.

Credit Suisse's Asia said due to the surging demand from for family offices the bank would set up a team for this service in Hong Kong by the first quarter of 2019, adding to its hub.

"Offshore Chinese wealth will continue to grow, so family offices business is going to be a multi-year trend," said Ivan Wong, for at

Asia will add 700 people by 2022, and some of those new hires will focus on family office clients, he said.

declined to comment.

Some of the regional financial firms are also looking to grab a bigger share of the business.

plans to hire six more bankers for a team set up in May to provide support to independent asset managers, including family offices in Hong Kong, said Derrick Tan, its of Greater and


The increased activity is also being helped by tax exemptions and other incentives offered by Hong Kong and Singapore.

The number of family offices in Singapore quadrupled between 2015 and 2017, the said in response to a query, adding those funds can avail of "fund tax exemption schemes" if they satisfy the conditions.

The city-state was depicted as a playground for the super-rich in the Hollywood hit film "Crazy Rich Asians".

Singapore Economic Development Board's said European families were also keen to access growth opportunities in Asia by establishing in the region.

Hong Kong plans to introduce a new structure that will offer "more flexibility and choices" in setting up funds, including those managed by family offices, said a for the and the

"The regulators have been very welcoming to family offices setting up here because that creates spinoffs for the as well," said Dawn Quek, a tax principal at Baker McKenzie Wong & Leow in Singapore.

(Reporting by Sumeet Chatterjee; Additional reporting by in Hong Kong and Anshuman Daga in Singapore; Editing by Muralikumar Anantharaman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, November 05 2018. 17:22 IST