- More and more high net-worth individuals are setting up family offices in Singapore
- Singapore government’s global investor programme gives ultra-rich a route to permanent residency
The world’s 1 percent of uber-wealthy individuals are setting up more and more family offices in Singapore, as they look to consolidate their holdings in the financial hub.
From 2017 to 2019, the number of family offices in Singapore grew by five times as the region got wealthier. Some of these offices were set up by Singaporean families who want to manage their assets better, but many were set up by foreign millionaires and billionaires lured by the city state’s financial reputation, its tax incentives, and the safe environment with a stellar education system it offers their children.
Some of these include Shu Ping, the billionaire co-founder of Chinese hotpot empire Haidilao; hedge fund billionaire Ray Dalio; and British industrialist James Dyson. Google co-founder Sergey Brin has also recently joined the club, establishing an office in Singapore late last year.
Close to the Chest
Traditionally, families have held their investments through holding companies or special purpose vehicles (SPVs). Many times this was driven by the need to maintain confidentiality, the perceived simplicity of setting up in offshore jurisdictions, and to achieve ring-fencing through separate SPVs. Increasingly, families have found that the use of complex structures involving multiple SPVs in different jurisdictions makes management unwieldy and inefficient.
Family offices allow ultra-rich clans to in-source the fund management function or at the minimum be more involved in the management of their financial assets. Many times, the investment team may also include the next generation family members who will be involved in managing what may ultimately be their wealth too.
Some family offices also manage philanthropic foundations that champion causes close to the family’s heart.
This surge in wealth is fueling demand for related services, according to the Monetary Authority of Singapore. Financial services groups like DBS Group, JPMorgan, and UBS Group are scrambling to add private bankers to cater to this growing sector.
Singapore’s ecosystem of asset management, wealth and succession planning, foreign exchange and derivatives trading has allowed family offices in Asia to outperform their global peers. The island nation’s proximity to China has also allowed it to take advantage of its stellar post COVID-19 growth.