Asian family offices are more likely to be dominated by family members than their counterparts in the US or Europe, according to new research carried out by the Swiss private bank Pictet and business school INSEAD.
The research says that 60% of the Asian family offices surveyed for the research are likely to be controlled by the family that set it up. They also play a dominant role in all of the investment decisions. This contrasts with US and European family offices, which are typically run by non-family professionals.
The report said: “In family offices at a nascent stage of institutionalization, hands-on entrepreneurs are typically involved in all facets of decision-making. While the need for objective investment processes and governance structures is largely acknowledged by regional wealth creators, in practice they typically dictate both strategic and tactical investment decision-making, often overriding any existing investment processes.”
Family offices in Asia – which are predominantly based in Hong Kong and Singapore – have yet to take off in Asia, with many wealthy individuals preferring to keep their money in their operating businesses. The report calculates that there are only between 100 and 200 single-family offices in the region, compared to thousands in the US and Europe. However, as family offices do increase in number, they are expected to professionalise. The much sought-after Asian family office boom is coming – but slowly.