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INVESTMENT, WEALTH & SECURITY


Report: Family Office ‘huge opportunity’ in Asia-Pacific


The World Wealth Report 2013 (WWR), prepared by Capgemini and RBC Wealth Management, suggests that with rising wealth, demand for Family Offices is growing in Asia. Zinzan Cunningham reports.


F


uelled by global recovery in the equity and real estate markets, the investable wealth of the world’s High Net Worth Individuals (HNWIs) rebounded in 2012, growing by


10% to reach a record high of $46.2 trillion, after declining 1.7 percent in 2011, according to the WWR. During the period of the Capgemini and RBC Wealth


Management WWR, 1 million individuals joined the global HNWI population, which reached 12 million, reflecting an increase of 9%. There is a rapid growth of HNWIs in the region


which touched 3.37 million individuals in 2011, with China now having the second highest concentration of billionaires in the world. The report suggests that although Family Offices


are under-represented in the Asia-Pacific region, the existing offices are growing towards maturity. “The Family Offices in the region, which number


just over 100, do not reflect the boom in regional wealth,” the reports says. “There is a huge opportunity for growth of


new Family Offices providing services such as inter-generational wealth transfer, philanthropy, and estate planning. The growth of HNWIs and ultra-HNWIs in Asia has outpaced the availability of experienced wealth managers and relationship managers. The wealth management industry is thus struggling to keep pace with the growing


“The reports suggests HNWI will need to prepare themselves for ongoing market volatility and extended periods of bimodal investment outcomes, with returns likely to be extremely positive or extremely negative, rather than equally distributed.”


number of Ultra-HNWIs in the region.” Growing wealth in the Asia-Pacific and Latin America


regions is pushing up demand for personalized financial services “The wealth in emerging markets of Asia-Pacific and Latin America has grown significantly over the last decade but there are not enough Family Offices with the required expertise to provide good investment advice. “Family offices in the US may want to expand


international operations and tap into the growing demand from emerging markets. They can set up offices or form local partnerships to service the ultrawealthy families in the region.” Globally, the combined wealth of ultra-HNWIs now stands at $14.7 trillion, despite a less robust growth in the last five years, the report says. Its Lorenz curve market sizing analysis shows


that during 2011, the Ultra-HNWI population in North America stood at 39,000 with a total wealth of $3.1 trillion. “The Asia-Pacific region is growing in terms of


wealth and has surpassed that of Europe with the ultra-HNWI population in Asia now standing at 23,000 with a total wealth of $2.6 trillion. In Europe, there are 22,000 UHNWI individuals worth a total of $2.3 trillion. If the global economy can sustain a move out of the financial crisis, the increase in the number of UHNWIs will continue to fuel the demand for more Family Offices.” Jean Lassignardie, Corporate Vice President,


Capgemini Global Financial Services, says additional drivers such as the economic performance in China, mature market headwinds, global political leadership changes and policy decisions will all play key roles in determining whether 2012 drives increases in HNWI wealth or further losses. The reports suggests HNWI will need to prepare


themselves for ongoing market volatility and extended periods of bimodal investment outcomes, with returns likely to be extremely positive or extremely negative, rather than equally distributed.


FAMILY OFFICE: THE FUTURE 65


INVESTMENT, WEALTH & SECURITY


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