Organisation:
Singapore Economic Development Board (EDB), Deloitte, Rajah & Tann Asia
Resource Link:
Published in 2021, Link
My Key Takeaways
Let’s talk a bit about successful global families and their activities in Singapore and Asia.
Asian wealth would grow 14% annually from 2017 to 2022, versus 11% globally (Boston Consulting Group).
In Singapore alone, the number of family offices (FO) increased five-fold between 2017 and 2019.
The above includes FOs founded in the West that have Asian satellite offices, and newly established Asian FOs in the city state.
Here are some of my takeaways from a report from Rajah & Tann Asia, Deloitte Private, and Singapore Economic Development Board (EDB) on the FO landscape in Singapore and five detailed case studies of established FOs in the country:
1) Case study 1 – with roots in Indonesia, the conglomerate Tolaram Group’s FO helped mitigate risk from exposure to emerging markets, structured with a three-tier governance framework:
a) Board: family members and professionals
b) Investment committee: professionals and one family member
c) Investment team: all professionals
The group built up in-house capabilities in Singapore to also manage third party funds and provide bespoked outsourced FOs.
2) Case study 2′s FO manages complex tax juridictions for the family with multiple nationalities and global assets (S$450 AUM), especially when one of the family members was a US-citizen subject to worldwide US income and assets tax.
3) Case study 3 – a Singaporean returned to Singapore from extensive experience in finance in the US to set up his own fund management business. He set up a FO to streamline costs and increase oversight of his portfolio as he faced challenges tracking the performance of different investment companies.
The FO’s family trust structure protected his privacy and allayed potential succession disputes between his children through a safety net.
4) Case study 4 – the founder of the Hong Kong-listed multinational conglomerate set up a private trust company (PTC) in SG to manage cross border onshoring of assets, charity donations and governance to avoid potential future conflict between his two children who have more than 10 years of difference in age.
5) Case study 5 – the German tech entrepreneur and his family had moved from Hong Kong to Singapore.
He did not have capacity to analyse and manage his own personal assets, and relied previously on external advisors on an ad hoc basis. This approach ended up with sporadic investments without a defined strategy, resulting in lost opportunities.
The entrepreneur’s FO appointed trusted advisors as directors to protect his privacy, provided a controlled training environment for his children in addition to other FO education programmes in Singapore, and supported his company’s global HQ in the country.
6) This section (see page 25) covers pros and cons of different early structures for a FO in SG (e.g. investment entity, variable capital company, trust arrangements).
7) EDB Singapore and the Monetary Authority of Singapore (MAS) established the Family Office Development Team (FODT) to strengthen SG’s position as a global wealth management & FO hub, while driving initiatives like:
- A skills map for FO advisors
- Family Office Circle – an exclusive platform for families with FOs in SG to network with peers, share resources, while opening up private market investment opportunities.
More information on the above initiatives here.
The growth of these FOs bodes well for deeptech sectors like healthcare, agrifood and advanced manufacturing in Singapore and Southeast Asia which flourish on patient, evergreen capital
My LinkedIn post here.
About Zhilin SIM
Having worked and lived in Singapore, the Nordics, China, Spain, UK, I’m now based in Paris.
I’m fluent in English, French and Mandarin, and I’m learning Arabic because it’s a beautiful and fascinating language.
My team creates and supports one-many initiatives connecting Corporate and Startup ecosystems in Europe to business and innovation opportunities in Singapore and Southeast Asia.
I’m passionate about horticulture, watercolour, startups/tech as well as French cuisine, Peranakan kueh techniques and other global cuisines.
Feel free to connect with me if you think my network in Europe and Asia could be of benefit to your business and innovation activities.
