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The family office quarrel between Singapore and Hong Kong is largely smoke and mirrors

For many years, Singapore and Hong Kong have fought over one of the main pillars of the two cities’ impressive economies – finance. Given the global importance of family offices, that fight is now coached in terms of this important part of the investment world. 

Singapore looks to be in the lead, but Hong Kong has the bigger family offices by far. In reality, there’s probably not much difference between the two.

Hong Kong might not be losing as much ground to Singapore in the fight for family office supremacy as some think

Singapore appears to have one of the fastest-growing family office sectors globally. That’s because many businesses register under the Singaporean government’s Standard Industrial Classification (SSIC) code 66306, which specifies being a Single/Multiple family offices activities (e.g. managing investments and trusts for a single or multiple families).

But most, as Family Capital showed, aren’t family offices. They are little more than shell companies, doing very little if anything. In fact, looking at Family Capital’s Analytics numbers, only around 40 Singapore family offices are actively doing direct deals in private markets. That’s pretty much the same as in Hong Kong. 

But interestingly, Hong Kong has some of the most active family offices anywhere, highlighted by Horizons Ventures, which ranks number five globally in the number of deals and value of those direct deals done, according to our numbers. Singapore’s most active family office is Vulpes Investment Management – but it only ranked 88 in the Analytics ranking. 

Of course, this analysis only provides a guide, but it shows that Hong Kong might not be losing as much ground to Singapore in the fight for family office supremacy as some think. 

That said, Hong Kong is going through more of an upheaval than its rival Singapore, with the growing influence of Beijing and the Chinese Communist Party in the city’s affairs. This development is unnerving an increasing number of people in the financial sector in Hong Kong. 

And this is helping Singapore. So, when Sergey Brin set up a subsidiary of his family office, Bayshore Global Management, in Singapore, in 2020, he and his advisors were influenced in their decision because Singapore’s rule of law is more robust and Beijing meddling isn’t an issue. 

But the flip side of this is big billion-dollar-plus family offices like Bayshore aren’t setting up branches in Singapore in any noticeable quantity to make a difference. So most will stay put as Asian investment opportunities might not look quite as good as a few years ago. 

The war in Ukraine is accelerating the deglobalisation that’s become more of a reality in the last few years. As a result, most family offices in North America and Europe will focus more on their home markets and be less interested in emerging markets. 

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