Single family offices in Asia-Pacific could increase by 40 per cent to 3,200 by 2030, and by 32 per cent to 4,190 in North America, Deloitte Private said in its global report released on Wednesday. The Middle East is still a “nascent” market, which is projected to expand 21 per cent by 2030 from 290 offices currently.
Globally, family offices are set to expand by one-third to 10,700 by 2030, with US$9.5 trillion of wealth between them, up from only US$5.5 trillion currently, according to the report.
“The pace at which the landscape in North America is expanding is slowing down given its relative maturity, while in Asia Pacific it is heating up given its more recent emergence in family offices,” according to the report.
The forecasts could prompt authorities in Hong Kong to step up their efforts to entice them to the city after dangling several sweeteners recently including permanent residency and tax breaks. It’s a sector pursued by Singapore and other rival financial hubs to help boost capital inflows, investment and employment in their economies.
Deloitte Private said family-offices are becoming more popular due to several reasons, including increased wealth concentration, successful transfers of generational wealth, the sale of family-owned businesses and the pursuit of more customised investment strategies and services.
Family wealth typically includes both the family office’s assets under management plus other assets it holds in its operating businesses, according to Deloitte.
The increase in wealth also underscores the need for sophisticated global wealth management structures, the report added. Their combined assets under management are expected to rise by 73 per cent to US$5.4 trillion globally by 2030, highlighting their growing influence in markets.
The family offices with the greatest investment power are based in North America, which has a total estimated assets of US$1.3 trillion, followed by Europe with US$949 billion, Asia-Pacific US$590 billion, and the Middle East US$159 billion, Deloitte said.
The predicted transfer of wealth between generations over the next 10 years could have a notable impact on family offices going forward. As more entrepreneurs exit from their family-run businesses, more cash could be deployed in the global financial markets, the report added.
“The competition for highly skilled talent could further intensify, alongside greater demand for third-party service provision to support the growth in family office activity,” Deloitte said.
