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and new personnel will be demanded by families wanting to retain privacy and control. As the demand for graduates from many mainstream


institutions diminishes, business schools at a few universities around the world are beginning to teach the Family Office model. They are preparing graduate students with some of the ‘new’ skills. These faculties will become the incubators for the skilled professional managers for the new emerging Asian and Middle East wealthy who will seek in-house employees. No longer is the family lawyer or family business


accountant fully equipped. The family now needs to embrace investment-ready internal expertise. These are individuals with broad economics and business skills as well as finance and investment expertise – particularly in private equity, direct property, alternative investments and other boutique and emerging management. The preservation of this wealth will require new diversified structures, offering long-term capital preservation and global exposure across multiple asset classes, simultaneously and in house. More and more investment counterparties will be


the new UHNWIs and their Family Office professionals. With Asian wealth surging to the point of overtaking the US in total assets in the next 10-20 years, families from Asia and the Middle East will seek to diversify from traditional markets and providers, and they will seek to do it themselves. After all, they made the money – why not work out how to manage the family legacy? The IFOA and associates like Richlink Capital and


10years IN


“ASIA WILL HAVE MORE FAMILY OFFICES THAN THE REST OF THE WORLD”


the Fortune Club in China are the new independent ‘go to’ providers who are educating the new wealthy about establishing their own private Family Wealth solution and, more broadly, a Family Office model. A solution and model that is relevant to regional cultures. The old ‘vanilla’ Western approach has, justifiably, little appeal to this emerging billionaire class.


The new regional shift Asia comprises at least 12 nations (more if including Australia, East Timor, Papua New Guinea and New Zealand), and comprises more than one third of the world’s land mass and two thirds of the its people. China and Japan are the second and third largest economies on the planet respectively, and China is growing at a compound 7%, and, for the past 10 years, at >10% . So it is not hard to understand that Asian wealth creation is expanding exponentially. The Asian Tigers – China, Taiwan, Republic of


Korea and Singapore – are leading the charge for Asian economic growth with indications the region will soon be the major economic zone. With that growth we predict that in 10 years there will be more Family Offices sponsored by Asians that the rest of the world combined. The other huge market for IFOA education and


empowerment of wealth is the Middle East where succession is a growing issue. It is a region that


14 FAMILY OFFICE: THE FUTURE


The real expansion of the Asia region will come from 2015-2018 and onwards when the Chinese currency, the Yuan, starts be made more flexible/ fungible. Once we see the gradual relaxation of the Chinese currency huge changes will occur.


will greatly benefit from appropriate Family Wealth structuring and Family Office formation, so much so that Middle East Family Office structures may be bigger in assets than many in Asia. But in total assets under advice and in sheer numbers, Asia will outstrip the rest of the world. Has the Asian expansion reached its peak?


The real expansion of the Asian region will come from 2015-2018 and onwards when the Chinese currency, the Yuan, starts be made more flexible/fungible. Once we see the gradual relaxation of the Chinese currency huge changes will occur. In turn, these changes will impact on global financial markets and we will see the rapid expansion of the economic influence globally of China. These changes will, of course, also impact on the


Chinese domestic equity market with liberalisation leading to China equities and debt being incorporated into the MSCI; as a result, all index tracking pension and sovereign funds will automatically allocate funds to these indices. This will then have a huge impact on the global economic balance. In turn, as Yuan bonds are issued and investment in China becomes more mainstream, these changes will have a huge impact on global bonds markets.


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