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Deloitte Private and Raffles Family Office (RFO) are pleased to announce the joint launch of The Family Office Insights Series—Asia Pacific Edition, which highlights this year’s key trends in family office risk management, investments, and succession planning.
The Asia Pacific Edition covers the top 10 family office trends and maps out the family office landscape in the region. The research, which surveyed 89 single family offices, found that despite geopolitical instability and uncertain market conditions, Asia Pacific family offices remain optimistic, with 84% expecting an increase in the family’s wealth this year and 77% expecting to see their AUM rise in 2024. They are also more likely than their global counterparts to scale up their initiatives and gain added expertise, with 48% of Asia Pacific-based family offices looking to increase their reliance on outsourcing services, higher than the global average of 34%.
Family offices are optimistic despite uncertain times, with 77% expecting to see their AUM grow in 2024, and84% expecting to see a rise in the family’s wealth. With these gains insight, over four in 10 family offices are looking to hire additional staff this year (43%), to increase the number of services they offer (38%), and to rely further on third-party outsourcing services (48%).
The top three perceived market risks in 2024 are a potential global recession (noted by 73% of respondents), geopolitics (55%), and inflation (44%). In turn, 67% of respondents rank investment risk management as a top strategic priority for 2024, followed by investment governance and valuation policies (53%).
The top asset classes family offices invested in were equities (25%), private equity and direct lending (21%), real estate (19%), and fixed income (19%) in 2023, accounting for more than four-fifths (84%) of the average family office portfolio.
The top asset classes they plan to increase their allocations to this year are developed market equities (32%)and real estate (31%).
Asia Pacific-based family offices allocate 32% of their average portfolio to investments outside their own region, and more than one in five plans on increasing their allocations to North America (23%) and Middle East-based (21%) investments this year.
Over half of family offices in Asia Pacific (52%) now engage in sustainable investing, and their portfolio share dedicated to sustainability is expected to nearly double over the next five years from13% to 24%. The top themes family offices are allocating to are good health and well-being, clean energy, and climate action.
Family offices are increasingly turning to outside talent for their recruitment needs, particularly within the C-suite. While 43% of family offices aim to shift toward more professional (non-family) staff in 2024, 31% say that an outside professional will lead the family office post succession, a notable increase from 22% today.
While 35% of families in Asia Pacific expect to undergo generational transition over the next decade, a notable 37% of families are currently without a succession plan. In turn, over a third (38%) of family offices have ranked succession planning as a top priority this year.
A notable portion of Next Gens will be undertaking leadership roles in the family office this year, such as that of a CEO (38%), board member (36%), manager/executive (30%), or director (21%). This comes as 69% of respondents claim that they expect a Next Gen to lead the family office post succession. That said, a notable proportion of family offices lack confidence in Next Gens’ ability to take over, raising concerns over their lack of qualifications (36%) and insufficient interest in the activities of the family office (23%). As a result, 33% say Next Gens’ core priority for 2024 is to receive mentoring/training, while 26% say it is to plan for succession.
Over half (53%) of family offices are developing or rolling out a technology strategy this year. This comes as nearly one in four (23%) identify inadequate investment in technology as a core family office risk, while nearly three-quarters (73%) admit they are either underinvested (33%) or only moderately invested (40%) in the operational technology needed to run a modern business.
Nearly a quarter (24%) of family offices have experienced a cyberattack over the last 12-24 months. However, more than a third (37%) of offices do not have a cybersecurity strategy in place, and 38% say they have a strategy, but it could be better. With roughly one in five family offices (18%) heralding cyberattacks as a core risk this year, now is the time for pre-emptive action, with 20% building out their cybersecurity strategy this year.
Family offices are optimistic despite uncertain times, with 77% expecting to see their AUM grow in 2024, and84% expecting to see a rise in the family’s wealth. With these gains insight, over four in 10 family offices are looking to hire additional staff this year (43%), to increase the number of services they offer (38%), and to rely further on third-party outsourcing services (48%).
The top three perceived market risks in 2024 are a potential global recession (noted by 73% of respondents), geopolitics (55%), and inflation (44%). In turn, 67% of respondents rank investment risk management as a top strategic priority for 2024, followed by investment governance and valuation policies (53%).
The top asset classes family offices invested in were equities (25%), private equity and direct lending (21%), real estate (19%), and fixed income (19%) in 2023, accounting for more than four-fifths (84%) of the average family office portfolio.
The top asset classes they plan to increase their allocations to this year are developed market equities (32%)and real estate (31%).
Asia Pacific-based family offices allocate 32% of their average portfolio to investments outside their own region, and more than one in five plans on increasing their allocations to North America (23%) and Middle East-based (21%) investments this year.
Over half of family offices in Asia Pacific (52%) now engage in sustainable investing, and their portfolio share dedicated to sustainability is expected to nearly double over the next five years from 13% to 24%. The top themes family offices are allocating to are good health and well-being, clean energy, and climate action.
While 35% of families in Asia Pacific expect to undergo generational transition over the next decade, a notable 37% of families are currently without a succession plan. In turn, over a third (38%) of family offices have ranked succession planning as a top priority this year.
A notable portion of Next Gens will be undertaking leadership roles in the family office this year, such as that of a CEO (38%), board member (36%), manager/executive (30%), or director (21%). This comes as 69% of respondents claim that they expect a Next Gen to lead the family office post succession. That said, a notable proportion of family offices lack confidence in Next Gens’ ability to take over, raising concerns over their lack of qualifications (36%) and insufficient interest in the activities of the family office (23%). As a result, 33% say Next Gens’ core priority for 2024 is to receive mentoring/training, while 26% say it is to plan for succession.
Over half (53%) of family offices are developing or rolling out a technology strategy this year. This comes as nearly one in four (23%) identify inadequate investment in technology as a core family office risk, while nearly three-quarters (73%) admit they are either underinvested (33%) or only moderately invested (40%) in the operational technology needed to run a modern business.
Nearly a quarter (24%) of family offices have experienced a cyberattack over the last 12-24 months. However, more than a third (37%) of offices do not have a cybersecurity strategy in place, and 38% say they have a strategy, but it could be better. With roughly one in five family offices (18%) heralding cyberattacks as a core risk this year, now is the time for pre-emptive action, with 20% building out their cybersecurity strategy this year.
Licenced by SFC Type 1, 4 & 9 & MAS Capital Market Services