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Hong Kong family office shifts focus to Singapore

Raffles Family Office expects to more than double AUM this year, even after putting mainland plans on hold.
Jaydee Lin, Raffles Family Office

In October, Raffles Family Office (RFO), which manages $2bn, established a Shanghai-based joint venture with I-Fast China, a subsidiary of Singapore-based I-Fast. RFO owns 70% of the venture, called Raffles Family Office China.

The firm set up the venture intending to address the ultra-high net worth segment in the mainland. However, due to the Covid-19 outbreak in China, plans of further expanding in Shanghai have been put on hold, according to Jaydee Lin, Singapore-based managing partner at RFO.

“We have everything registered now in China and have also set-up our We Chat page. But because of the Covid-19 outbreak, everything has been put on hold at the moment, especially since there is a travel ban and we cannot fly there,” Lin told FSA recently.

“At the moment, we will be focusing on Singapore,” he said, adding that business has also slowed down in Hong Kong since the protests started last year.

Hong Kong remains the firm’s largest office with about 35 staff, including relationship managers and investment professionals, according to Lin. The majority of the firm’s assets are also sourced from Hong Kong, particularly from offshore mainland Chinese clients.

But the firm has its sights elsewhere in the region. In 2018, it set up its Singapore office and last year started operations in Taipei.

From two people in 2018, the Singapore team now has 18 staff, which include six relationship managers, one portfolio manager and operational support — human resources and business development.

“Some of the Hong Kong staff, [including the portfolio managers, compliance and legal counsel], provide support to the Singapore office. The Hong Kong office is a very oiled machine, and we plan for Singapore to be the same,” Lin said.

Doubling AUM?

This year, RFO has a boldly ambitious target of more than doubling AUM to $5bn, according to Lin. Much of the firm’s focus will be in Singapore and plans are to hire more bankers there to grow assets.

“We are working on setting up teams at the moment, with some expected to be coming on board [this year],” he said.

Although Singapore is also affected by the Covid-19 pandemic, with a majority of firms cancelling major events, it is still business as usual for RFO, he said.

Lin believes Singapore’s wealth management industry is set to grow this year on the back of new regulations under the city’s global investor programme.

Effective this month, the programme will allow wealthy foreign investors to achieve permanent residency status in Singapore within 12 months if they invest S$2.5m ($1.76m) in a Singapore-based family office that has at least S$200m in assets, according to government documents.

Lin added that the firm will be setting up locally-domiciled funds under Singapore’s new variable capital company (VCC) framework, which should help grow AUM. RFO is one of the 20 firms in Singapore that were first allowed to set up a VCC.

RFO expects to launch three different strategies under the VCC framework for its clients, according to Lin, but did not elaborate on which asset classes they will invest in.

“They are different from each other as each has their own mandate set by [different groups of investors],” he said.

The firm is also targeting other Asean markets, with two bankers focusing on Thailand and Indonesia. For other “emerging Asean” markets, such as Vietnam, Laos, Cambodia and Myanmar, plans are to establish partnerships with local firms, he said.

Separately, the sell-off continues in global markets due to investor panic over the worldwide Covid-19 outbreak and Lin claims that his firm’s portfolio managers sold sizable equity holdings and are holding cash “waiting for the right opportunities to buy on dips”.

Within the global equity markets, the firm prefers the technology and 5G-related sectors, as it believes that these stocks are able to rebound more quickly during market corrections. The firm also likes healthcare, given its long-term secular story as well as positive fundamentals, Lin said.

Part of the Mark Allen Group.