As of the end of 2012 there was reportedly more than 5,000 family offices operating glob-ally, according to London-based consultancy WealthInsight. The majority of these family offices are based in Europe and the US and includes some 2,700 single family offices managing approximately $1.7 tril-lion and 2,300 multi-family offices managing some $800bn in assets.
This breakdown of family offices is included in WealthInsight’s spring report, which uses a database comprising dossiers on over 60,000 high net worth indi-viduals (HNWIs) from around the world. Among the key findings included in The Family Office Report 2013 is that globally there are currently some 16.8 million people classed as HNWIs (those with readily convert-ible assets of $1m) with their worldwide wealth standing at $66 trillion. Family offices account for 13% of global wealth management assets under management ($19.3 trillion), the report states.
Although the US and Europe dominate the existing family office market, the WealthInsight report purports that the combination of the regulatory and political fall out from the 2008 crisis is creating challenges for businesses in these regions. The analysts noted in particular the tougher rules stemming from the Dodd-Frank Act presents a significant hurdle for US family offices and are making the marketplace less attractive.
Meanwhile the problems in Europe have been well publicised and it still suffers from continued uncer-tainty in its political, economic, social and legal envi-ronment.
“Many European family offices are now changing the ways in which they manage investment risk and con-duct due diligence; furthermore, they are broadening their investments beyond equities and hedge funds by including alternative asset classes such as gold, precious metals and farmland.”
According to the The Family Office Report 2013 the Asian region may be becoming a more attractive and promising market for family office growth potential as a result. “Despite the burgeoning number of HNWIs in the Asia-Pacific region, if one excludes Australia, there are fewer than 150 family offices operating in the area. “With the predicted explosion of HNWIs in Asia compounding the fact China already has the world’s second highest concentration of billionaires and centi-millionaires, the demand for wealth management in the region will soon far outstrip supply, creating ideal con-ditions for the growth of new family offices.”
Consequently, the report estimates there will be over 1,000 new Asian family offices created by 2020, with Hong Kong and Singapore being the most attractive locations as a result of their favourable economic, social and tax conditions.
The report reads: “Asia’s rising wealth is creating more millionaires and billionaires than any other region in the world, and WealthInsight predicts that Asia’s 3.3 million HNWIs will triple to nearly 15.8 mil-lion by 2015.”
More recently WealthInsight released research on where some of the richest people live, listing the top 20 cities for millionaires worldwide. Topping the list is Tokyo, followed by New York City, London, Paris and Frankfurt. However, rounding out the top 10 list are Asian cities: Beijing, Osaka, Hong Kong, Shanghai and Singapore.
