Amid heightened market volatility, family offices in Asia-Pacific have been reassessing their portfolios, with the majority increasing their cash allocations, a new report finds.
At the same time, family offices in the region are most bullish on investment-grade fixed income (43%), private credit (33%), private equity direct investments (29%), and emerging market equities (29%), according to the results of the 2023 Family Office Survey by Citi Private Bank’s global family office group.
In the public markets, there is noticeable preference for technology (76%), healthcare (61%), and financials (37%), the survey finds.
On family office management and governance, 64% of respondents in the region cite wealth management services as their primary focus, followed by investment management at 62%. This is in line with findings in other regions as family offices contend with the uncertain macro environment.
The survey also points to the increasing professionalization of family offices. In Asia-Pacific, 63% of respondents have already separated their entities from their family businesses while 13% are still working on it. About 55% have clear processes and internal controls in place, while 49% have formal strategic plans.
The appetite for sustainable investments in Asia-Pacific is higher than in other regions. Only 6% of respondents in the region lack any exposure to sustainable investing – the lowest percentage relative to other regions.
“With respondents in this region holding a sizable proportion of investible cash, and with their bullish outlook on investment-grade fixed income, private markets and emerging market equities, we would expect to see investment activity in the region pick up,” says Jonathan Gan, South Asia head of Citi Private Bank’s global family office group.
“Family offices have complex and incredibly specific needs, making it critical for them to have in place the correct structures and governance, in addition to identifying investment preferences and needs,” adds Faye Ong, head of family office advisory, Asia, at the global family office group.
This year’s survey drew responses from 268 participants globally, the highest number of responses since the inception of the survey, with 21% of respondents from Asia-Pacific.