UBS Group expects family office growth in Asia to continue

ZURICH • UBS Group expects most new family office clients to come from Asia as global banking rivals compete to manage funds and broker deals for the world's wealthiest clans.

"The number of family offices being set up in Asia far outpaces" the rest of the world, said Mr Anurag Mahesh, head of the bank's family-office operations in Asia.

"Wealth (in Asia) is getting more and more sophisticated and being created at a rather unprecedented pace," Mr Mahesh added.

The collective fortunes of China's richest people grew by a staggering 65 per cent, or US$177 billion (S$236 billion) last year, according to the Bloomberg Billionaires Index, a ranking of the world's 500 wealthiest people.

Asia is now home to 27 per cent of the people on the list, second only to North America.

Asia's ultra-rich are increasingly looking for more complex and global investments as a record number of patriarchs cede control to the next generation.

Younger family members, whose wealth came from traditional industries such as real estate and natural resources, often seek to diversify into biotech and digital businesses, with Silicon Valley of particular interest, Mr Mahesh said.

Last year, Zurich-based UBS secured a private-funds licence in China, allowing the investment unit to start managing money for mainland institutional and high-net-worth investors in Asia's largest economy.

"In Asia, the clients are less advanced in terms of the sophistication of the family offices structures," said Ms Sara Ferrari, head of the Global Family Office which was started seven years ago. "We're moving as they are moving."

The firm may add to its team of about 100 family office bankers in the region, Ms Ferrari said.

Competition is intensifying, with Credit Suisse tilting towards wealth management and Goldman Sachs aiming to add over 200 private wealth advisers in the next two years.

JPMorgan offers its large family office clients an array of services, from access to direct private equity and real estate deals to M&A and brokerage advice.

Family offices have mushroomed in recent years as private wealth surged and more people took an interest in actively managing their affairs, said Mr John Matthews, head of private wealth management and ultra-high net worth for UBS Wealth Management Americas.

Newer, more flexible iterations of the traditional model - like family offices that are virtual or manage money pooled from several families - mean family offices can make sense for a wider range of people.

"Years ago, you had to have around US$500 million to have a legitimate family office," said Mr Matthews. "That number is going down now, to around US$200 million to US$150 million."

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A version of this article appeared in the print edition of The Straits Times on June 13, 2018, with the headline 'UBS Group expects family office growth in Asia to continue'. Print Edition | Subscribe