Family offices in the region are leading in issues such as separating the family office from the family business (75%) and having a leadership succession plan (51%).
Nearly three-quarters (74%) of respondents said they were well or very well prepared for leadership transitions, according to the fifth Citi Private Bank’s Global Family Office 2024 Family Office Survey, released this week.
Moreover, the results show that family offices in Asia Pacific are ahead in deploying more capital into public equity and increasing direct investing.
However, cost (45%) and regulatory compliance (48%) are seen as the main challenges for family offices in Asia Pacific, which may be because the family office industry is relatively new and developing rapidly in the region. There is also more outsourcing to external service providers in the region, said the report authors.
“The family office industry in Asia continues to grow and evolve rapidly – becoming ever more complex with time,” said Bernard Wai, Asia Pacific head, global family office group, Citi Private Bank.
“Our family office clients are increasingly becoming more global as they seek to create and preserve wealth amidst new market challenges and opportunities,” added Ida Liu, head of Citi Private Bank.
Several key findings also emerged on the investment activity, sentiments and preferences among Asia Pacific family offices.
The survey revealed a shift in portfolio allocations. Public equities and fixed income saw their weightings rise from 22% to 28% and 16% to 18%, respectively. Private equity also dipped from 22% to 17%, which may have been accentuated by valuations taking longer to adjust upward compared to those of public equities.
Nevertheless, 68% of respondents reported increased allocation into public equity – the highest percent relative to other regions. Family offices said they were positive on the outlook for global developed equities (48%), direct private equity (49%) and private equity funds (48%).
Direct investing activity was also highest in Asia Pacific, with 69% of respondents reporting increased and significantly increased activity.
Results show an interest in a broad range of activities across the M&A spectrum, including strategic acquisitions (20%), joint ventures (23%), divestitures (9%) and mergers (14%).
As many a 63% of respondents expect their portfolios to increase by 10% or more in the coming year, the highest percent relative to other regions.
“As interest rates evolve and geopolitical challenges persist, ultra-high net worth investors and their families are putting cash to work and shifting their portfolios toward public and private equity. Family offices are focused on the future as they navigate evolving markets worldwide,” said Liu.
