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1、THE ASIA-PACIFIC FAMILY OFFICE REPORT 2022The Asia-Pacific Family Office Report 2022Page 2 of 84This document has been prepared by Campden Wealth Limited.A number of sources were utilized to research and profile the characteristics of family offices.These were blended into a mosaic analytical framew
2、ork from which Campden Wealth Limited conducted extensive modelling and analysis.This information and data is part of data and analytics structures that Campden Wealth Limited is authorized topublish and are non-commercial in nature,and specifically non-attributable regarding the identity of any und
3、erlying family offices and individuals.Information contained in this publication has not been tailored to the specific needs,investment objectives,or personal and financial circumstances of any recipient.It has been prepared for general guidance on matters of interest only,and does not constitute pr
4、ofessional advice of any kind.You should not act upon the information contained in this publication without obtaining specific professional advice.Although all pieces of information and opinions expressed in this document were obtained from sources believed to be reliable and in good faith,no repres
5、entation or warranty(expressed or implied)is given as to the accuracy,completeness or reliability of the information contained in this publication,nor is it intended to be a complete statement or summary of the developments referred to in it.All information and opinions expressed in this document ar
6、e subject to change without notice and may differ or be contrary to opinions expressed by other business areas or divisions of Campden Wealth and Raffles Family Office Limited.Campden Wealth Limited and Raffles Family Office Limited are under no obligation to update or keep current the information c
7、ontained herein.To the extent permitted by law,Campden Wealth Limited and Raffles Family Office Limited do not accept or assume any liability,responsibility or duty of care for any consequences of you or anyone else acting,or refraining to act,in reliance on the information contained in this publica
8、tion or for any decision based on it.Campden Wealth Limited and Raffles Family Office Limited and any of their respective directors,employees or agents do not accept any liability for any loss or damage arising out of the use of all or any part of this document.This document is for your information
9、only and is not intended as an offer to sell or a solicitation of an offer to buy any security,investment instrument,product or other specific service.Readers considering the information in this document are encouraged to obtain appropriate independent legal,tax and other professional advice.The con
10、tents of this publication are protected by copyright.All rights reserved.The contents of this publication,either in whole or in part,may not be reproduced,stored in a data retrieval system or transmitted or redistributed in any form or by any means,electronic,mechanical,photocopying,recording or oth
11、erwise,without written permission of the publisher.Action will be taken against companies orindividual persons who ignore this warning.Campden Wealth Limited 2022.All rights reserved.Campden Wealth Limited refers to the Campden Wealth Limited network and/or one or more of its member firms,each of wh
12、ich is a separate legal entity.First published in 2022 by Campden Wealth Limited.Campden Wealth LimitedNova North,6th Floor,11 Bressenden Place London,SW1E 5BYUnited KingdomTelephone:+44(0)20 3941 8015Email:Web:ISBN:978-1-915184-08-5The Asia-Pacific Family Office Report 2022Page 3 of 84Forewords 4Ex
13、ecutive summary 61.The family office landscape 81.1 Introduction 91.2 Overview of participants 101.3 Legal structures 142.Investments 162.1 Asset allocation 18 Investment strategy 18 Portfolio 23 Allocations to emerging technology 26 Geographic diversification 282.2 Performance 30 Singapore:The view
14、 from the top 322.3 Asset class focus 34 Real estate 34 Private equity 36 Direct investment 39 Sustainable investing 412.4 Service provision 45 APAC venture capital:Very much a family affair 48 3.Structures 503.1 Family office costs 523.2 Human capital 554.Purpose 584.1 Family office governance 60 R
15、isk management 624.2 Family office risk and cybersecurity 62 Risks 62 Cybersecurity 634.3 Succession planning and the next generation 65 Succession planning 65 The next generation 67 New horizons for digital assets 724.4 Philanthropy 745.Conclusion 765.1 Looking ahead 77About family offices 78Who wo
16、uld benefit from using a family office?79List of figures 80About the creators 82Acknowledgements 83ContentsPage 4 of 84ForewordsThe Asia-Pacific Family Office Report 2022Dear reader,The culmination of rising inflation and interest rates,geopolitical risks as well as other global events have led to c
17、ycles of market volatility and uncertainty over the last 12 months.This has driven a surge in interest towards alternative investments among wealthy families,and we see this trend carrying over into the new year.This shift is one of the key observations from our latest Asia-Pacific Family Office Rep
18、ort,as we continue our partnership with Campden Wealth in exploring the investment trends and themes that shape the family office landscape across the region.Thanks to Asia-Pacifics robust economic growth,the region is now home to nearly forty percent of the worlds billionaires.Almost seventy percen
19、t of the family offices who participated in our report in Asia-Pacific saw an increase in family wealth in 2021 and more than half expanded their assets under management.Looking ahead,succession planning and addressing the needs of the next generation are top priorities among affluent families with
20、an intergenerational wealth transfer soon to take place.Coupled with a global recession in the horizon,identifying the risks and opportunities will be crucial to growing and preserving wealth for these families.As a leading multi-family office in Asia,Raffles Family Office has been serving the needs
21、 of ultra-high net worth families since 2016,providing tailored and quality investment advisory and solutions across a myriad of asset classes.Deeply rooted in this region,we have a keen understanding of the local markets and are committed to bringing long term value to our clients.I would like to t
22、hank the families,advisors and executives who contributed to our report this year,and I look forward to another prosperous year for family offices across the region.Sincerely,Chi-man Kwan Group CEO&Co-Founder Raffles Family OfficePage 5 of 84The Asia-Pacific Family Office Report 2022Dear reader,Extr
23、aordinary events have conspired to produce an unprecedented outcome.A pandemic,war in Europe,economic mismanagement,and political instability have cast dark shadows over Western democracies and the capitalist enterprise on which it is built.The economic consequences,galloping inflation,soaring inter
24、est rates,collapsing stock markets,and looming recessions means that 2022 will go down as the year that everyone will want to forget.Will Asia-Pacific family offices be able to successfully navigate this rocky terrain?They are certainly aware of the difficulties.Nearly ninety percent of respondents
25、cite inflation as a significant risk to financial markets,with rising interest rates coming in a close second,and increasing geopolitical tensions third.Its no surprise that respondents view investment risk as their principal concern.Our survey provides evidence that family offices have been prescie
26、nt,adjusting the mix of their portfolios to deal with a more difficult environment.Seventy percent now operate conservative investment strategies focusing on balance and wealth preservation,a higher proportion than the global average.Although 2022 has been a very difficult year,hopefully,through pro
27、fessionalized investment management the worst outcomes will have been avoided.Further,unlike investment managers,family offices do not have to worry about outperforming benchmarks or fund redemptions;in short,they can afford to take a long-term view.Other concerns of family offices focus on data sec
28、urity and succession planning.Here,unlike financial markets,they are to a considerable extent,masters of their own destiny.Seventy percent have cybersecurity and succession plans in place.Half of all family offices see their Next Gens as sufficiently well prepared for succession.As ever,more could b
29、e done,but its apparent that family offices havent been standing still.The picture of Asia-Pacific family offices presented here reveals nimble,dynamic,and most importantly resilient organizations.They are sophisticated participants in global financial markets,but nonetheless driven by values encour
30、aging them to embrace social,environmental,and philanthropic goals to“make the world a better place”.Their founders and principals are high achievers who have built companies from scratch,undertaken leadership roles in business,managed complex investments,and overseen family-related responsibilities
31、.Officers are experienced professionals,undertaking a diverse range of activities.The next generation are well-educated with an entrepreneurial spirit.Hopefully,all three groups will find something of interest in this report,which is intended to be the most extensive study of family offices yet unde
32、rtaken.As we charter our path through difficult times,what will help the family office community is the ability to share information and learn from one another.I would like to thank our partner Raffles Family Office for their long standing commitment to the community and this report.I would also lik
33、e to extend my deep gratitude to all of those who participated in this research.Dominic Samuelson Chief Executive Officer Campden WealthThe Asia-Pacific Family Office Report 2022Page 6 of 84Executive summaryExecutive summaryThis report is based on statistical analysis of 382 surveys of family office
34、s worldwide,with 76(20%)coming from Asia-Pacific.The average family represented from Asia-Pacific has wealth of US$1.2 billion,while the estimated wealth of all participants stands at US$94 billion(total global wealth across the report series is estimated at US$699 billion).The average Asia-Pacific
35、family office has assets under management(AUM)of US$592 million,while estimated AUM across all participants is US$45 billion(total global AUM across the report series is estimated at US$390 billion).The following denotes the key takeaways:Inflation:risk number one Inflation is the most commonly cite
36、d risk for financial markets(88%of respondents).This is closely followed by rising interest rates(72%)and geopolitical risk(58%).A consequence of higher risk is that 42%of family offices now operate a balanced investment strategy,up from 40%last year,and the percentage operating a growth strategy ha
37、s declined from 32%to 30%.The remaining 28%operate a wealth preservation-based strategy,a higher proportion than the global average.Mitigation strategies Popular strategies adopted to mitigate the adverse impact of inflation include increasing exposure to real estate(52%),equities(50%),and commoditi
38、es(29%),and reducing the duration of bond portfolios(34%).Going forward,these measures may provide some insulation for family offices from the difficult conditions now evident from the recent performance of public markets.Shift to private equity continues Over the past year the biggest shift in port
39、folio allocation has been towards private equity which now stands at 23%of AUM,an estimated two percentage point increase on last year.This trend is likely to continue.The most popular asset classes for future investment are private equity funds(57%),developing market equities(55%),and venture capit
40、al(50%).The asset class most likely to see a decrease in allocation is fixed income in both developed(25%)and developing markets(16%).Cryptocurrency:Family offices remain committed 2022 has been a sobering experience for investors in cryptocurrency.But despite price declines and adverse newsflow,59%
41、of those family offices already invested continue to hold their allocation,while 25%actively want to increase their investment.Conceivably,this may stem from cryptocurrency now being more rationally priced,and recognition that every new asset class has experienced similar setbacks.The Asia-Pacific F
42、amily Office Report 2022Page 7 of 84Sustainable investing,up and away Forty-two percent of family offices in Asia-Pacific are now engaged in sustainable investing,with 29%of their portfolios dedicated to sustainability,an increase of four percentage points on last year and two percentage points high
43、er than the global average.This percentage is expected to increase to 50%over the next five years.Family offices are avid tech investors The most popular sectors for technology investment are healthcare,with 66%of respondents allocating here,followed by green tech(60%),artificial intelligence(59%),f
44、intech(56%),and biotech(50%).Looking to 2023,the technologies most likely to see a rise in allocation are green tech(62%of family offices already invested),digital transformation(52%),artificial intelligence(44%),biotech(42%),and healthcare(38%).Family office involvement with nascent technologies is
45、 necessarily lower than with those which have been long established,but significant percentages of Asia-Pacific family offices have exposure to the metaverse(23%),Web 3.0(19%)and non-fungible tokens(NFTs)(13%).Cybersecurity:time to build defences Data/identity theft(cited by 28%of family offices)and
46、 risks to information architecture(26%)have become more significant concerns for Asia-Pacific family offices,up from 9%and 13%respectively last year.Thirty-five percent of family offices feel either very or somewhat unprepared to face a cyber-attack.Nonetheless despite these concerns,almost a quarte
47、r of family offices have no cybersecurity plan in place,and no plans to acquire one.Succession planning:always a challenge A major intergenerational transition will soon be underway.A fifth of Asia-Pacific family offices expect their next generation to take control over the next five years.While 70%
48、have a succession plan,many of these are unwritten or only agreed informally,raising a question mark over implementation.Discomfort discussing sensitive family matters,reported by 34%of family offices,adds to the challenges of succession planning,as does the presence of a patriarch or matriarch who
49、is unwilling to relinquish control(30%).77%10%of Asia-Pacific family offices identified investment risk as the number one risk to family officesis the average 2021 portfolio return for Asia-Pacific family offices88%of Asia-Pacific family offices cited inflation as a significant risk to financial mar
50、ketsPage 8 of 84The Asia-Pacific Family Office Report 20221.The family office landscape 1.1 Introduction 1.2 Overview of participants1.3 Legal structuresPage 9 of 84The Asia-Pacific Family Office Report 20221.1 Introduction 1 https:/data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=Z42 https:
51、/ https:/ family office landscape“A satisfied man is happy even if he is poor,a dissatisfied man is sad even if he is rich.”Chinese proverbAsia-Pacifics position as the worlds principal economic growth engine is well-documented and hasnt been derailed by Covid-19.According to the World Bank1,the reg
52、ions gross domestic product(GDP)was 6%larger in 2021 than it was immediately prior to the pandemic.Over the five years to 2021,Asias economy expanded 21%while global GDP advanced only 12%.Savings and investment are principal ingredients of both successful economies and wealth creation.Its not surpri
53、sing to find that the region is home to 38%of billionaires listed in the Forbes World Billionaires List 20222.Some indication of the pace of wealth creation in the region is evidenced by the fact that five years ago Asia-Pacific accounted for only 17%of global billionaires.This growth is also picked
54、 up in this years survey.Eighty percent of the regions family offices were founded after the millennium and of these two-thirds were established post-2010.China and India have been in the vanguard of this development,but its fair to say that the expansion has been witnessed across the region.The pop
55、ularity of family offices stems from the emergence of a new generation,well-educated and trained in finance,which is shifting its focus from running family businesses to controlling broadly-based investment vehicles.Asia-Pacific family offices turned in a creditable performance in 2021 with 45%outpe
56、rforming their investment benchmarks.However,the estimated average investment return of 10%was lower than the 15%achieved in the prior year and somewhat less impressive than returns achieved by family offices in Europe(13%)and North America(15%).However these regions benefited from strong stock mark
57、et gains,economies recovering from the pandemic,and a positive environment for private equity realizations.Unfortunately,2022 is providing the exact opposite;the first six months saw Wall Streets worst performance in 50 years3,inflation is forcing interest rates higher,and U.S.and European economies
58、 are on the cusp of recession.Sixty-nine percent of senior Asia-Pacific family office executives have a negative economic outlook for 2022/2023.Last year almost 70%of respondents identified inflation as the biggest threat to financial markets.The most recent survey indicates that,as this risk crysta
59、llized during the first quarter of 2022,many family offices were ahead of the game,and preparing for the worsening environment through increasing their equity and real estate exposures,selling bonds,and shortening the duration of fixed-rate portfolios.Although overall investment returns in 2022 will
60、 almost certainly be lower than the double-digit gains of the last two years,it is likely that professional investment management will mitigate the worst outcomes.Unlike investment managers family offices do not have to worry about outperforming benchmarks or fund redemptions;in short,they can affor
61、d to take a long-term view.Turbulent times often throw up the best investment opportunities,and with liquid diversified portfolios many will be well placed to take advantage.Highlighting this trend,54%of Asia-Pacific family offices report they are still on the lookout for new investment opportunitie
62、s despite deteriorating macroeconomic fundamentals and volatile markets.While family offices globally have been shifting their portfolios into private equity,Asia-Pacific family offices are in the vanguard of this trend with 57%looking to increase their exposure to private equity funds,and 50%lookin
63、g to increase their exposure to venture capital.Green tech,digital transformation,artificial intelligence,biotech,and healthcare are identified as the most promising technologies for future investment.Among more nascent technologies,significant percentages of Asia-Pacific family offices have exposur
64、e to NFTs(13%)and the metaverse(23%).Separately 23%and 47%respectively view them as promising investment opportunities.These are just a few of the findings from this report,which is accompanied by North American and European editions,to provide a robust global overview.The report series aims to be t
65、he most in-depth available on family offices.It covers topics such as investing,performance,operational costs,technology,cybersecurity,governance,risk,succession planning,the next generation,philanthropy,and more.With a robust sample of 382 participants,this report provides a detailed picture of the
66、 family office landscape.Methodology This research is both quantitative and qualitative.The survey was undertaken between March and June 2022 and a total of 382 surveys worldwide were selected for statistical use,with 76 of these coming from Asia-Pacific.In addition,in-depth interviews were conducte
67、d with 32 family office executives worldwide,with nine from Asia-Pacific.Only single and private(not commercial)multi-family offices were included in the analysis.We define private multi-family offices as entities that serve no more than eight families and the core family must hold,at least,50%of th
68、e offices total AUM.For the purposes of comparing Asia-Pacific findings,reference is made in the text to comparable findings from North American and European family offices,along with global averages.These references relate to the North American and European editions of this regional series.The Asia
69、-Pacific Family Office Report 2022Page 10 of 84The following provides a profile of the family offices which participated in this research.Four in five respondents are from Asia-Pacific-based single family officesOf the family offices present in Asia-Pacific,79%are single family offices,with 61%being
70、 independent from the family business and 18%being embedded in the family business.The remaining 21%are private multi-family offices,which are defined as entities that serve no more than eight families and the core family must hold at least 50%of the offices total AUM(Figure 1.1).76 family offices f
71、rom Asia-Pacific participatedExecutives from 76 family offices headquartered in 11 markets in Asia-Pacific participated in the survey which forms the basis of this report.The headquarters of 28%are in Singapore,26%in Hong Kong SAR,China(Hong Kong),20%in India,and 7%in both China and Australia.Office
72、s from Indonesia,Japan,Malaysia,New Zealand,Pakistan and the Philippines are also represented(Figure 1.2).1.2 Overview of participantsFigure 1.2:Asia-Pacific:location of family officesAustralia 7%China 7%Hong Kong 26%India 20%Indonesia 1%Japan 1%Malaysia 1%New Zealand 5%Pakistan 1%Philippines 3%Sing
73、apore 28%Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Figure 1.1:Type of family office representedGlobal73%Asia-Pacific61%Europe77%Global16%Asia-Pacific18%Global11%Europe12%Single family office independent from family
74、 businessSingle(or hybrid)family office embedded within family businessPrivate multi-family officeNorth America78%North America5%North America17%Europe12%Asia-Pacific21%Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 202228%26%20%7%7%5%3%The Asia-Pacific Family Office Repo
75、rt 2022Page 11 of 84Globally,382 family offices responded Forty-seven percent of participating family offices are from North America,27%Europe,20%Asia-Pacific,and 6%from emerging markets,which include South and Central America,Africa,and the Middle East(Figure 1.3).Figure 1.3:Global breakdown of fam
76、ily offices by regionSource:Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022North America47%CanadaCayman IslandsMexicoUnited StatesAsia-Pacific20%AustraliaChinaHong KongIndiaIndonesiaJapanMalaysiaNew ZealandPakistanPhilippinesSingaporeEmerging markets6%AlgeriaBrazilChi
77、leColombiaCosta RicaIsraelKenyaKuwaitEurope27%AndorraAustriaBelgiumCyprusCzech RepublicFinlandFranceGermanyHungaryIrelandItalyLiechtensteinLithuaniaLuxembourgMonacoNetherlandsNorwayPolandSpainSwitzerlandTurkeyUkraineUnited KingdomLebanonMauritiusNigeriaPeruSaudi ArabiaUnited Arab EmiratesYemenPage 1
78、2 of 84The Asia-Pacific Family Office Report 2022Average Asia-Pacific family wealth US$1.2 billion;total estimated wealth US$94 billion The average family wealth of those surveyed across Asia-Pacific stands at US$1.2 billion,while their estimated total wealth is US$94 billion(Figure 1.4).The respect
79、ive figures for those surveyed worldwide are US$1.8 billion for average family wealth and US$699 billion for estimated total wealth.For private multi-family offices,the total net worth of all families.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Figure 1.4:Total we
80、alth of participating families including operating business in US$Average wealth Total wealth Global$1.8 billionGlobal$699 billionAsia-Pacific$1.2 billionAsia-Pacific$94 billionEurope$1.9 billionEurope$193 billionNorth America$363 billionNorth America$2.0 billionAverage Asia-Pacific family office AU
81、M US$592 million;total estimated AUM US$45 billionThe average assets under management(AUM)of family offices surveyed across Asia-Pacific stands at US$592 million,while their total estimated AUM is US$45 billion(Figure 1.5).The respective figures for those surveyed worldwide are an average AUM of US$
82、1.0 billion and estimated total AUM of US$390 billion.Total AUM For private multi-family offices,the total net worth of all families.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Figure 1.5:Family office assets under management(AUM)in US$Average AUM Global$1.0 billi
83、onGlobal$390 billionAsia-Pacific$592 millionAsia-Pacific$45 billionEurope$1.4 billionEurope$147 billionNorth America$182 billionNorth America$1.0 billionExpansion of family offices across the regionAsia-Pacific family offices are the newcomers to the family office community.Eighty percent were found
84、ed after 2000,compared to 70%for offices globally(Figure 1.6).Of these,two-thirds were established in the last 12 years,confirming a dramatic increase in family wealth across the region and the emergence of family offices as vehicles for wealth preservation and management.“I think the reason why the
85、 number of family offices has increased so dramatically in recent years is because of a new,very well-educated generation which is financially literate and entrepreneurial and more interested in investing in emerging companies,industries,and technologies than operating a staid family business.”Chief
86、 Executive Officer,multi-family office,Hong Kong“We frequently hear of family offices setting up in Singapore,but what we dont quite know is whether they are establishing a permanent base or whether this is just part of their organization temporarily squatting in a serviced office.”Chief Executive O
87、fficer,single family office,Singapore Figure 1.6:When the family office was foundedGlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Before 19-19-20192020 or later12%11%5%4%
88、14%5%30%26%35%42%5%12%Page 13 of 84The Asia-Pacific Family Office Report 20222021,a great year for families and family officesSixty-eight percent of Asia-Pacific family offices reported an increase in family wealth over 2021,while 17%stated the increase was significant(Figure 1.7).This not only refl
89、ected the strength of most financial markets,but also benign conditions for families operating businesses,with 58%reporting an increase in revenues.Family offices also prospered with 63%increasing their AUM,and around one-third seeing a rise in professional non-family staff.Outsourcing and bringing
90、services in-house are two distinct operating models for family offices.Both proved popular last year with 22%of family offices reporting an increase in outsourcing and 22%an increase in in-house services.Over half of Asia-Pacific family offices reported increases in the number of risk measures and g
91、overnance structures they employ.Likewise,over half saw an increase in IT infrastructure(with 15%citing the increase as significant),highlighting the importance of upgrading systems and cybersecurity measures.Finally,40%of family offices saw Next Gens taking a greater degree of control,a step toward
92、s the major generational transition which is set to occur over the coming decade.Figure 1.7:Percentage of family offices reporting changes over the last 12 monthsSignificant increaseSlight increaseNo changeSlight decreaseSignificant decreaseOperating business revenue19%14%35%44%36%28%7%8%3%6%Total f
93、amily wealth23%17%49%51%19%21%8%8%1%3%Shift towards more professional,non-family member staff 4%4%25%32%69%61%3%3%0%0%Reliance on bringing family office services in-house1%3%19%19%72%70%6%4%1%4%IT infrastructure9%15%38%39%53%43%1%3%0%0%Family office assets under management(AUM)17%14%41%49%37%32%5%4%
94、1%1%Number of family office staff4%4%26%28%63%59%6%8%0%0%Reliance on outsourcing family office services to third parties3%4%22%18%71%75%3%1%1%1%Number of risk measures/structures in place5%11%39%42%54%42%2%6%0%0%Next generation taking greater control7%10%31%30%60%58%3%3%0%0%GlobalAsia-Pacific Note:F
95、igures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Page 14 of 84The Asia-Pacific Family Office Report 2022Best structure for startupsAlthough just over 60%of respondents were independent single family offices,only 41%thought this
96、 was the best structure for a new family office startup(Figure 1.8).Rather,19%believed that a virtual family office,with only one to two staff and all services outsourced,might be more appropriate.The percentages in favor of hybrid and private multi-family offices echo the percentage of each type of
97、 office participating in the survey.Figure 1.8:Best perceived structure for a new family office Single family office independent from the family business41%56%Single(or hybrid)family office embedded in the family business19%14%Virtual family office(only 1-2 staff and outsources the bulk of its work)
98、19%20%Private multi-family office(owned by families and operated for their benefit)18%8%Commercial multi-family office(owned by commercial third parties)4%2%GlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2
99、022 Most are happy with their structure Asia-Pacific family offices satisfaction level with their existing structure(82%)is lower than the global average,and there is a notable minority which wish to become virtual offices(Figure 1.9).Figure 1.9:Percent of family offices happy with their existing st
100、ructure and those seeking an alternative 82%89%Happy with existing structure4%4%Wish to becomea single family office8%4%Wish to become a virtual family office5%4%Wish to join a multi-family officeGlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,
101、The Asia-Pacific Family Office Report 2022 Almost one-third to establish additional branchesBecause they are relatively underdeveloped,geographic expansion is important to family offices in Asia-Pacific(Figure 1.10).The most popular location for opening a new branch is Europe(9%),closely followed by
102、 North America(8%)and Asia-Pacific(8%).In some cases,the desire for diversification stems from regulatory constraints.“A problem for Indian family offices is diversification.This arises because of a limit on the amount of currency an individual can send out of the country to US$250,000 per annum.To
103、get around this,many of the operating companies associated with family offices open branches outside India.Alternatively,some family members may become non-resident.This is encouraging a relocation of family offices to Singapore and Dubai.”Head of single family office and family member,India1.3 Lega
104、l structuresPage 15 of 84The Asia-Pacific Family Office Report 2022No,we currently have no plans to set up an additional branch70%85%Yes,in Europe9%5%Yes,in North America8%5%Yes,in Asia-Pacific8%3%Yes,in the Middle East3%1%Yes,in Africa3%1%Yes,in South America1%1%Figure 1.10:Family offices intending
105、 to establish an additional branch(es)and intended locationGlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Page 16 of 84The Asia-Pacific Family Office Report 20222.Investments2.1 Asset allocation Inves
106、tment strategy Portfolio Allocations to emerging technology Geographic diversification2.2 Performance Singapore:The view from the top2.3 Asset class focus Real estate Private equity Direct investment Sustainable investing2.4 Service provision APAC venture capital:Very much a family affairPage 17 of
107、84The Asia-Pacific Family Office Report 2022 After recent turmoil in financial markets,family offices have become more risk-averse and Asia-Pacific family offices remain at the conservative end of the spectrum.Twenty-eight percent are focusing on wealth preservation,compared to a global average of 1
108、8%,and only 30%are focusing on growth,compared to a global average of 34%.Public equities is the largest asset class,constituting,on average,32%of Asia-Pacific family offices AUM.But in terms of new investment,the most popular asset classes are private equity funds and venture capital,with 57%and 50
109、%of family offices looking to increase holdings,respectively.The overall average portfolio return among Asia-Pacific family offices is estimated at 10%in 2021,down from 15%in 2020.In our 2021 survey,69%of family offices globally saw inflation as posing a risk to financial markets.Unfortunately,the w
110、orst fears of this group were realized in Q1 of this year when U.S.inflation rose to high single digits.Asia-Pacific family offices have attempted to adjust to a high-inflation environment by increasing exposure to public equities and real estate,and shortening the duration of bond portfolios.But,as
111、 cited by 88%of respondents,inflation is still the number one risk to financial markets(Figure 2.2).Forty-two percent of family offices in Asia-Pacific are now engaged in sustainable investing,with 29%of their portfolios allocated to the cause,an increase of four percentage points on last year and t
112、wo percentage points higher than the global average.This percentage is expected to increase to 50%over the next five years.88%of Asia-Pacific family offices cited inflation as a significant risk to financial markets10%is Asia-Pacific family offices average investment return in 202142%of Asia-Pacific
113、 family offices now engage in sustainable investing 2.InvestmentsPage 18 of 84The Asia-Pacific Family Office Report 2022Investment strategyMoving down the risk curveTraditionally,family offices have favoured a conservative approach to investment,maintaining a balance between the need to preserve cap
114、ital and the desire to grow wealth.Asia-Pacific family offices are more conservative than most,with 28%viewing preservation as their primary objective(Figure 2.1).The comparative figures are 22%for European and just 10%for North American family offices.Correspondingly,the percentage of Asia-Pacific
115、family offices operating a growth strategy(30%)is lower than elsewhere.Deteriorating macroeconomic fundamentals,major market setbacks in the early part of 2022,and increased volatility have undermined confidence and prompted a re-assessment of investment objectives.Relative to 2021,the proportion of
116、 family offices operating growth strategies declined 4 percentage points in both Europe and North America in favour of balanced portfolios.The decline for Asia-Pacific family offices was just 2 percentage points,probably because the initial commitment to growth strategies was lower.Despite current d
117、ifficult conditions in financial markets,family offices appear upbeat about the longer term.Forty-six percent of Asia-Pacific family offices believe that in 10 years they will be operating a growth strategy,a much higher percentage than at present.The percentage with wealth preservation as their obj
118、ective will be down to 10%.If this transpires to be the case,then Asia-Pacific family offices will no longer look more conservative than their global peers.“We are generation three,we didnt create the wealth.The first thing we did was exit the family business to protect what had been built by the pr
119、oceeding generations and then preserve it through diversification.We never saw the need for an aggressive investment strategy and high-return expectations.Its our task to protect wealth and use it for a purpose.”Chief Executive Officer,single family office,Singapore“Were not manic in the way we mana
120、ge portfolios.Portfolio turnover is extremely low,probably sub-10%.Were very thoughtful and we buy assets with a very long duration holding period in mind.Were happy to be patient across the asset cycle,because we focus on fundamental value and we feel that weve got a reasonable handle on what an in
121、vestment is intrinsically worth.”Chief Financial Officer,single family office,Australia2.1 Asset allocationFigure 2.1:The main investment objective of the family office for 2021,2022,and in 10 years timePreservationPreservationPreservationBalancedBalancedBalancedGrowthG Growth Gr Growth 37%45%48%49%
122、18%18%10%34%41%32%40%42%44%28%28%10%30%46%36%44%46%46%20%22%15%32%40%43%47%51%51%10%10%7%39%41%2021202210 yearsGlobalEuropeAsia-PacificNorth America Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Page 19 of 84The Asia-P
123、acific Family Office Report 2022Inflation:the biggest riskThe conventional wisdom at the end of 2021 was that inflation was the product of transport dislocation and supply chain constraints and would therefore prove no more than a temporary blip,set to disappear as the impact of the pandemic faded.M
124、any family offices were sceptical;in our 2021 survey 69%saw inflation as posing a risk to financial markets.Unfortunately the worst fears of this group were realized in Q1 of this year when U.S.inflation rose to high single digits.Despite strategies to adapt to a high inflation environment,it is sti
125、ll perceived as a risk by 88%of Asia-Pacific family offices(Figure 2.2).Recognizing that the authorities would deal with inflation through tighter monetary policy,rising interest rates rank second in the list of investors concerns,with geopolitical risks coming in third.Asia-Pacific family offices p
126、erceptions of risk generally mirror those of their global counterparts.Where they differ is in regard to new variants of Covid-19,Chinas economic growth,currency devaluation,and cryptocurrency regulation,which are all more of a concern to the former.“I dont think the pennys dropped about inflation.I
127、n the Goldilocks economy you dont have to worry about it.But we are no longer in the Goldilocks economy and inflation is likely to remain high and sticky.So,it really will have a catastrophic effect on the value of family wealth if its left in bonds and cash.”Chief Executive Officer and family membe
128、r,multi-family office,Australia“We are bearish.We dont like the massive expansion of central banks balance sheets.Everywhere,GDP growth is being propped by credit.De-dollarization of economies,as is underway in China and Russia,increases currency risk generally and reduces stability across the finan
129、cial system.”Chief Executive Officer,single family office,Singapore“Chinas economy is slowing.Ive seen this first hand because 50%of the commodities my company produces are sold in China.But the real problem China faces is that its cost structures have risen.Can it continue to be the worlds manufact
130、uring base?”Director and family member,single family office,India Figure 2.2:Most significant market risks perceived by family offices over the coming 12 monthsGlobalEuropeAsia-PacificNorth America Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Re
131、port 2022 Inflation88%78%85%88%Geopolitical risks58%61%56%53%Ukraine/Russia conflict53%45%42%39%Stagflation(inflation,slow growth)35%44%40%39%Real estate overvaluation15%18%18%21%A material stock market decline40%23%36%44%Covid-19 pandemic/new variants35%9%18%17%Economic slowdown in China30%24%24%20
132、%Devaluation of currencies25%11%17%16%European energy crisis28%37%23%14%Defaults-corporate/governmental18%7%13%13%A supply shortage leading to a supply glut23%16%19%19%Cryptocurrency regulation drive13%4%7%6%Rising interest rates72%54%65%72%Page 20 of 84The Asia-Pacific Family Office Report 2022Infl
133、ation hedgeIncreasing exposure to real estate,equities,and commodities are textbook investment strategies for dealing with a high-inflation environment.The logic is simple.Landlords can raise rents,companies can raise the price of finished goods,and commodity prices will go up.Figure 2.3 shows that
134、52%of Asia-Pacific family offices are relying on real estate exposure to tackle inflationary risk,and 50%on equities.Additionally,34%have shortened the duration of their bond portfolios to reduce sensitivity to adverse interest rate movements.Strategies such as increasing exposure to inflation-prote
135、cted securities or diversifying into cryptocurrency are not regarded as viable solutions.While the inflation hedges listed above will be advantageous in the long run,timing is critical.Prices of bonds and equities have both fallen in parallel through the year so a switch from the former to the latte
136、r would not necessarily have been beneficial.“Inflation is now the number one enemy across the world.I see inflation as a legislated tax;it hasnt been approved by Parliament,but the Reserve Bank mandated it through printing money.I dont think a lot of family offices have got their minds around how t
137、hey are going to deal with it.They really need assets such as listed shares,high-value residential real estate,shopping centres,agricultural land,those sorts of real assets to have a fighting chance of beating inflation.”Chief Executive Officer and family member,multi-family office,Australia“Commodi
138、ties offer a potential hedge against inflation.Recognizing that inflation is going to be a big issue at some point,we added two investments with large commodities exposure to our quoted investment portfolio at the end of 2021.We intended to do more but other opportunities presented themselves.There
139、is always competition for capital.”Director,single family office,Australia“We think Australia is a great destination for domestic and international investors seeking a natural inflation hedge.The Australian dollar has hedging properties because of world-leading energy and natural resources companies
140、 which will be beneficiaries of a higher oil price,while many industries that rely on oil such as plastics,pharmaceuticals,and cosmetics will be penalized.”Chief Executive Officer and family member,multi-family office,Australia“Over 50%of our private equity portfolio was in tech.That was largely bec
141、ause it had been so successful in the past.But these are long duration assets with negative cashflow and returns are coming a long way off in the future.These returns are therefore vulnerable to higher inflation and higher interest rates.Weve tried to shorten the duration by investing in businesses
142、like online consumer products which are already cash positive,and re-investing that cashflow to produce compound growth.”Director,single family office,Australia Page 21 of 84The Asia-Pacific Family Office Report 2022Figure 2.3:How the family office is tackling inflation risk 50%13%0%43%13%0%Increasi
143、ng exposure to equitiesReducing cash reserves/increasing borrowingIncreasing exposure to cryptocurrency as a hedge against inflation52%13%45%10%Increasing exposure to real estate13%10%Treasury inflation-protected securities(TIPS)and index-linked bonds34%27%Decreasing duration of bond portfolioIncrea
144、sing exposure to floating-rate bondsGlobalAsia-Pacific Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 29%29%Increasing exposure to commoditiesPage 22 of 84The Asia-Pacific Family Office Report 2022The hunt for new opportunitiesDespite
145、difficult macroeconomic fundamentals,54%of Asia-Pacific family offices are still on the lookout for new investment opportunities,particularly those which would add diversification to portfolios(46%)(Figure 2.4).A preference for alternative investments(42%)also highlights the importance of diversific
146、ation.Figure 2.4:Family offices top investment priorities for 2022 5%5%Increasing portfolio leverage54%12%52%9%Seeking new investment opportunities20%12%Pursuing more overseas investmentDecreasing portfolio leverage20%16%Reducing exposure to cash42%44%Seeking alternative investmentsGlobalAsia-Pacifi
147、c Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 46%34%Seeking to diversify portfolio39%31%Re-aligning portfolio towardsgrowth opportunitiesPage 23 of 84The Asia-Pacific Family Office Report 2022PortfolioPublic equity,the biggest asset
148、 classAs previously noted,Asia-Pacific family offices are currently more conservative than their global peers in terms of investment strategy.This shows through in their strategic asset allocation to fixed income securities(16%of AUM)with much of the difference related to developing market debt(Figu
149、re 2.5).Despite the global sell-off prompted by rising nominal interest rates,some developing market bonds(e.g.Indian government debt)remain attractive to family offices which hold them to maturity because of their high coupons.Asia-Pacific family offices allocation to public equity markets,although
150、 identical to the global average at 32%of AUM,has a greater bias towards developing markets.AlternativesPrivate equity and private debt holdings of Asia-Pacific family offices,at 26%of AUM,is also close to the global average of 27%,but real estate assets are three percentage points lower than global
151、 peers.Alternative investments(hedge funds,commodities,and agricultural land)are also lower at 5%(compared to 7%),but gold/precious metals are higher(2%compared to 1%).Larger cash balances(7%compared to 5%)point to the more conservative strategies operated by Asia-Pacific family offices.Figure 2.5:F
152、amily offices average strategic asset allocation 2022BondsFixed income developing marketsFixed income developed markets9%3%EquitiesEquities developing marketsEquities developed markets27%5%Real estateREITsReal estate direct investments13%1%Private equity and debtPrivate equity fundsPrivate debt/dire
153、ct lendingPrivate equity direct investmentsVenture capital10%6%8%3%AlternativesAgriculture(forest,farmland,etc.)Gold/precious metalsHedge fundsCommodities4%1%2%1%OtherCryptocurrencyCash or cash equivalentTotalSPACs(special purpose acquisition company)5%100%0%1%8%1%31%4%14%1%9%6%9%3%6%1%1%1%5%100%0%1
154、%8%3%26%5%15%0%14%5%8%2%2%2%2%2%5%100%0%1%8%8%22%10%10%1%10%6%7%3%3%1%1%2%7%100%0%0%GlobalEuropeAsia-PacificNorth America Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Page 24 of 84The Asia-Pacific Family Office Report
155、 2022Looking to 2023Globally,family offices are looking to reduce their asset allocation to fixed income,but those in Asia-Pacific are the exception,with significant percentages intending to increase holdings of both developed(35%)and developing market(28%)debt(Figure 2.6).Asia-Pacific family office
156、s are also purchasers of public equities,particularly in developing markets(55%),to a significantly greater extent than their global peers.Still looking to increase private equityGlobally,private equity remains the most popular asset class among family offices,but enthusiasm for private equity funds
157、 and venture capital is even greater among those in Asia-Pacific with 57%and 50%respectively looking to increase holdings.Separately,when asked whether the family had a growing interest in private markets,84%replied affirmatively for private equity and 44%for private debt.Forty-seven percent of fami
158、ly offices are looking to increase their real estate exposure given its capacity to act as an inflation hedge.Overall investment intentions havent changed materially from last year with family offices showing strong appetite for public and private equities,except that demand for developing market eq
159、uities has overtaken developed market equities,and private equity funds have overtaken direct investment.However given the difficult macroeconomic and interest rate background,it would not be surprising if these optimistic investment intentions are ultimately scaled back.Cryptocurrency:Family office
160、s still committed Last year,we reported that 19%of Asia-Pacific family offices and 28%globally invested in cryptocurrency.The current survey reveals significant increases,with these figures rising to 28%and 32%respectively,although cryptocurrency is no more than 1%of AUM(Figure 2.5).It would seem th
161、at families have been“testing the water”to familiarize themselves with this asset class,without putting significant capital at risk.But 2022 has been a sobering experience for financial markets generally and cryptocurrency in particular.Bitcoin and Ethereum have plummeted by almost 70%from their pea
162、k values achieved in the final quarter of last year.A key catalyst was the Terra Luna crash,when the mechanism linking a stablecoin algorithmically to another cryptocurrency failed under the weight of new minting.Fallout quickly spread to the crypto eco-system of exchanges,hedge funds,and deposit-ta
163、kers.When asked whether cryptocurrency was a promising investment,only 18%of family offices agreed,compared to 53%in 2021.Interview comments from family office executives have been more negative than positive.Despite the above,59%of family offices already invested in cryptocurrency are happy to cont
164、inue hold their investment(Figure 2.6)and 25%actively want to increase their allocation.Conceivably this may stem from cryptocurrency being more rationally priced,and recognition that every new asset class has experienced similar setbacks.The unique characteristics and benefits of cryptocurrency,ind
165、ependence from governments,fast processing times,and portfolio diversification have not been negated.“Like other family offices in India,we have a sizeable fixed income portfolio,around 20%of our total assets.This is because we want a high degree of liquidity in our portfolio.Additionally,the yield
166、on this portfolio is around 10%,so it provides useful cashflow.We use the cashflow to buy stocks or invest in private equity deals.Bond yields have risen this year,but since we hold our bonds to maturity we are not concerned by mark-to-market losses.”Director and family member,single family office,I
167、ndia “We have little or no interest in owning bonds or fixed interest that produce negative rates of return.Central banks are not going to let official rates get to where they really need to be to combat inflation.The indebtedness of the U.S.government is too high.Theres US$27 trillion of bonds issu
168、ed at close to zero yield,they will have to be refinanced in due course and the higher rates go above 3%the more prohibitively expensive this becomes for the government.”Chief Executive Officer and family member,multi-family office,Australia“We like China simply because of the sheer size of its emer
169、ging middle-class population.We invest directly in public companies rather than through U.S.companies doing business in China or the U.S.stock exchange.However,you must be prepared for the unexpected,most recently,the authorities reaction to the resurgence of Covid-19.”Adviser,multi-family office,Ch
170、ina“Gold remains a significant percentage of our overall portfolio,so weve never had a good reason to divest.Given our concerns about the distortions produced by quantitative easing and debasement of currencies,this isnt surprising.Were not convinced that alternative assets like cryptocurrencies can
171、 take the place of gold because cryptocurrencies are behaving more like tech proxies.”Chief Executive Officer,single family office,Singapore Page 25 of 84The Asia-Pacific Family Office Report 2022Fixed income developed markets REITsFixed income developing markets Hedge fundsEquities developed market
172、s Agriculture(forest,farmland,etc)Equities developing marketsCommoditiesPrivate equity direct investmentsGold/precious metalsPrivate equity fundsCash or cash equivalentVenture capitalCrypto-currencyPrivate debt/direct lendingSPACs(special purpose acquisition company)Real estate direct investmentsFig
173、ure 2.6:Family offices intention to increase,maintain,or decrease allocation to the following asset classes:GlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 IncreaseIncreaseMaintainMaintainDecreaseDecre
174、ase35%18%40%60%25%22%32%13%65%82%3%5%28%16%56%68%16%16%31%16%63%71%6%14%48%36%38%46%15%18%20%23%73%72%7%6%55%26%30%61%15%13%36%31%55%65%9%4%39%41%48%50%13%9%35%18%61%78%3%4%57%47%34%44%9%9%20%20%27%43%52%37%50%40%41%50%9%9%25%28%59%66%16%6%35%31%53%61%12%8%6%3%71%87%23%10%47%43%37%43%16%15%Page 26 o
175、f 84The Asia-Pacific Family Office Report 2022Allocations to emerging technologyPopular sectorsThe five most popular sectors for investment are healthcare(66%),green tech(60%),artificial intelligence(59%),fintech(56%),and biotech(50%)(Figure 2.7).This closely matches the preferences of family office
176、s globally,except the latter select digital transformation rather than artificial intelligence.When asked whether artificial intelligence was increasingly relevant to the companies in which they invest,90%of Asia-Pacific family offices replied affirmatively compared to 80%globally.Involvement with n
177、ewer technologies is lower than with established ones,though a significant share of Asia-Pacific family offices have exposure to the metaverse(23%),Web 3.0(19%)and NFTs(13%).Future allocationsFor new investment,Asia-Pacific family offices view green tech(62%of those already invested),digital transfo
178、rmation(52%),artificial intelligence(44%),biotech(42%),and healthcare(38%)as the most attractive technologies,again not dissimilar to global preferences.There is a clear overlap between technologies in which family offices are already invested in and those where they are seeking to increase their al
179、location,demonstrating they are cautious investors and like to put their toe in the water to gain understanding and experience before making more significant investments.As regards new nascent technologies,36%of those already invested in blockchain are interested in increasing their involvement,as a
180、re 32%of those invested in Web 3.0 and 23%of investors in the metaverse.Separately,when asked whether cryptocurrency,NFTs,and the metaverse are promising investment opportunities,18%,23%,and 47%of Asia-Pacific family offices respectively agreed.On this measure the metaverse appears most likely to be
181、 the recipient of future family office investment.Page 27 of 84The Asia-Pacific Family Office Report 2022Figure 2.7:Family offices with investments in identified technologies and their intention to increase,maintain,or decrease asset allocation Already investedIncreaseMaintainDecreaseGlobalAsia-Paci
182、fic Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Healthcare5%57%38%66%2%57%41%72%Biotech 0%58%42%50%3%61%36%60%Fintech 11%50%39%56%5%60%36%61%Digital transformation 0%48%52%49%1%58%41%56%Green tech 3%35%62%60%1%53%46%
183、54%Artificial intelligence 3%53%44%59%2%58%41%52%Cryptocurrency 16%59%25%28%6%66%28%32%Blockchain 12%52%36%28%4%66%30%32%Data Centers 3%72%25%18%1%81%18%29%Water tech 0%67%33%21%1%68%31%28%Web 3.0 10%58%32%19%2%74%24%28%The metaverse 10%67%23%23%4%81%15%21%NFTs10%72%17%13%6%84%10%12%Page 28 of 84The
184、 Asia-Pacific Family Office Report 2022Overcoming impediments Structural features of the cryptocurrency market,set out in Figure 2.8,have been cited as impediments to future investment.These include lack of regulation(60%),volatility(55%),and limited understanding of the future potential of cryptocu
185、rrency(45%).But 28%of Asia-Pacific family offices have an exposure to cryptocurrency,a percentage which has increased from 19%over the past year.Hence it is possible that these impediments are weighing less heavily on the minds of investors,and in the future tighter regulation and better investor ed
186、ucation will lead to the asset class being accepted as mainstream.“We certainly wouldnt own any Bitcoin or any other cryptocurrency because we think that intrinsically theyre worth zero.Its a confidence-based market.Just because its big,doesnt mean its safe.Were happy to not participate in those sor
187、ts of products,because were seeking a satisfactory return for the risk we take.”Chief Executive Officer and family member,multi-family office,Australia“Weve never done anything with cryptocurrency.But they are a topic of interest for us,we need to have a view even if we continue to sit on the sideli
188、nes.”Chief Executive Officer,single family office,Singapore“Its not that were uninterested in cryptocurrency or NFTs,but its difficult to get involved in a way that feels comfortable from an institutional custody perspective.I dont want to have a password thats essentially going to allow me to trans
189、fer millions of dollars of my principals assets elsewhere.I dont want to be in a situation where I could be accused of doing that.Similarly,I dont want to have to involve them every time we need to make a transaction.In my opinion,the market is not mature enough yet to allow us to invest in asset cl
190、asses like these.”Chief Executive Officer,single family office,New Zealand Geographic diversificationWell diversifiedThe U.S.is home to the worlds two largest stock markets(NYSE and NASDAQ)so it is not a surprise that 77%of Asia-Pacific family offices have investments in North America(Figure 2.9).Tw
191、o-thirds have exposure to Europe.It appears investment portfolios are well diversified geographically,and as indicated from Figure 2.5,developed market bonds and equities constitute 30%of AUM.However,involvement with more esoteric markets in the Middle East and South America are relatively modest.In
192、 terms of future investment,Asia-Pacific is still deemed the best place to be with 46%of family offices looking to increase their exposure,but 39%are also looking at North America.Lack of regulation60%52%Figure 2.8:Impediments to investing in cryptocurrency GlobalAsia-Pacific Note:Multiple options p
193、ermitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Lack of understanding45%41%Lack of market maturity40%43%Volatility55%51%Insufficient security43%36%Preference for traditional investments21%28%Poor user experience17%14%Climate-related concerns 17%15%Other8%12%B
194、elief the crypto market will fade25%24%Page 29 of 84The Asia-Pacific Family Office Report 2022Figure 2.9:Percentage of family offices with investment(s)in geographic region and their intention to increase,maintain or decrease their investment(s)North AmericaNorth AmericaAsia-PacificAsia-PacificSouth
195、 AmericaSouth AmericaAsia-PacificGlobalEuropeEuropeMiddle EastMiddle EastAfricaAfrica10%6%2%5%13%8%51%61%52%63%80%83%39%33%46%32%7%9%77%94%96%81%21%37%12%12%10%4%15%5%63%64%81%90%64%83%24%24%10%6%21%13%67%85%13%20%25%23%Already investedAlready investedIncreaseIncreaseMaintainMaintainDecreaseDecrease
196、GlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Roughly seven in 10 APAC family offices invest in ChinaDespite its geographic proximity,only 68%of Asia-Pacific family offices have exposure to China,whi
197、ch is only marginally higher than the percentage for family offices globally(Figure 2.10).However,34%of offices already invested in China are keen to increase their investment.Figure 2.10:Percentage of family offices with investment(s)in China and their intention to increase,maintain or decrease the
198、ir investment(s)Asia-PacificGlobal16%50%34%68%21%54%24%62%Already investedIncreaseMaintainDecreaseGlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022“While avoiding residential real estate,we continue to i
199、nvest in China via private equity and credit,and through hedge funds.Our overall allocation is increasing and if we compare ourselves to other groups,we are probably under-invested.”Adviser,multi-family office,China“One of the problems of being a foreign investor in China is whether youre in equity
200、or credit,frankly,as you are subordinated to the provision of capital from local sources.”Adviser,multi-family office,China “The slowdown in China is one thing,but the gradual decoupling from the West will be a bigger issue.Presently we see the China crackdown in sectors like education and technolog
201、y where the government is really stepping in.I dont think we could do any direct investment in China anytime soon.”Chief Executive Officer,single family office,Singapore Page 30 of 84The Asia-Pacific Family Office Report 2022Returns:a detailed lookLooking at returns in more detail in Figure 2.12,mid
202、-teens from private equity and low double digits from equities were clearly creditable outcomes but they were somewhat overshadowed by exceptional returns from European and North American family offices.Some of this can be attributed to the lackluster performances of regional stock market indexes li
203、ke the Hang Seng and CSI 300 relative to the S&P 500,which rose 27%over the course of the year.Further,with buoyant stock markets,economies recovering from the pandemic,and ultra-low interest rates,the backdrop for private equity realizations in Europe and North America could hardly have been more p
204、ropitious.Without a tail-wind from these positive factors,and possibly slightly hamstrung by their conservative investment strategies favoring wealth preservation over growth,its not surprising the average return on investment for Asia-Pacific family offices,at an estimated 10%,was three percentage
205、points lower than the global average,and five percentage points lower than in 2020.2021,an exceptional outcome Forty-five percent of Asia-Pacific family offices claim to have outperformed their benchmark in 2021 and only 12%underperformed which could be viewed as an exceptional outcome(Figure 2.11).
206、2.2 PerformanceFigure 2.11:Percentage of family offices where investments out-performed,met or under-performed their overall benchmark in 2021Asia-PacificGlobalOutperformedMetUnderperformed14%41%45%12%28%60%GlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Fam
207、ily Office,The Asia-Pacific Family Office Report 2022 Page 31 of 84The Asia-Pacific Family Office Report 2022Figure 2.12:Average net return by asset class generated by family office in 2021BondsFixed income developing marketsFixed income developed markets5%4%EquitiesEquities developing marketsEquiti
208、es developed markets17%10%Real estateREITsReal estate direct investments14%9%Private equityPrivate equity fundsPrivate debt/direct lendingPrivate equity direct investmentsVenture capital20%21%19%9%AlternativesWeighted average returnAgriculture(forest,farmland,etc.)Gold/precious metalsHedge fundsComm
209、odities8%11%8%3%OtherCryptocurrencyCash or cash equivalentSPACs(special purpose acquisition company)2%1%13%11%3%4%18%8%17%10%21%26%22%11%10%13%3%1%1%2%15%11%5%3%17%11%11%9%22%17%17%4%6%8%9%4%1%0%13%13%6%7%11%10%9%5%15%15%13%8%9%8%6%4%5%0%10%12%GlobalEuropeAsia-PacificNorth America Campden Wealth/Raf
210、fles Family Office,The Asia-Pacific Family Office Report 2022 OutlookGoing forward,given the year-to-date performance of public markets,there is a clear perception that the 2022 outcome wont match that of the last two years.When asked whether the economic outlook for 2022/2023 was positive,68%of Asi
211、a-Pacific executives disagreed.But Asia-Pacific family offices did not benefit from the buoyant conditions of 2021 to the same extent as their global counterparts.Conceivably this may provide some insulation against the difficult conditions now evident.“In current market circumstances,its going to b
212、e much harder to get exits from private equity positions.We thought wed have a couple of exits through public offerings later this year,but the likelihood of that happening is now very low.We have had to adjust our capital allocation accordingly by not making any new investments.We may miss a few go
213、od opportunities on the other hand if there is a recession.That would be a good time to jump back in.”Director,single family office,Australia “In mid-2021,some of our investments would have been held on the balance sheet at a much lower valuation than their market value.I think the opposite is true
214、today.We recognize that if we want to liquidate our portfolio,we will definitely take a hit.Eventually what happens in public markets filters through into private market valuations.”Chief Executive Officer,single family office,Singapore The Asia-Pacific Family Office Report 2022Page 32 of 84The Dire
215、ctor of a multi-family office in Singapore explains the development of family offices in the region,the factors which distinguish them from their global counterparts,and the rivalry between Hong Kong and Singapore.In his role as a fund manager,hes hopeful that Chinas long-term prospects will survive
216、 the current political turbulence.He believes inflationary pressures will ease if supply side issues are addressed.Why do so many family offices in Asia-Pacific still have a family business attached to them?“This difference is a feature of different stages of economic development.Here in Asia,much o
217、f the wealth has been built up in the last two generations and families still tend to retain the original businesses from which the wealth was created.In the U.S.and to an even greater extent in Europe,wealth has been accumulated over several generations,and the family businesses were sold a long ti
218、me ago,or otherwise converted into financial assets.This of course is entirely logical;its diversification removing concentration risk from the family portfolio.Anecdotally,what I notice about the wealth creation generation in Asia is that it is incredibly street-smart and driven.The next generation
219、 often achieves great things academically,and then goes on to spend a few years working in a bank or other financial institution.At the end of this,they are often more interested in the world of finance than in running or developing the family business.This is,of course,a huge generalization,but ext
220、rapolating from this,it follows that over time Asian family offices will move closer to their U.S.and European counterparts.Furthermore,its much easier and cheaper to start a family office in Hong Kong or Singapore than in the U.S.or Europe.One reason is that we dont need as much tax planning advice
221、 as there is in the U.S.and Europe,where mitigation of taxation requires the beneficiaries of wealth to be kept at arms length away from it.Governments are perennially attempting to find ways to expropriate assets.This hasnt been a feature in Asia.”There have been several well-publicized cases of fa
222、mily offices moving from Hong Kong to Singapore.Whats behind this trend?“Singapore is trying to attract sources of capital,but an easy one for it to appeal to is very wealthy Chinese.Its Chinese-speaking with a large ethnic Chinese diaspora.This is the generation that made its fortune post Chinas en
223、try into the World Trade Organization in 2001,and Singapore is the easiest,and most familiar place they can get to outside mainland China.Its also in the same time-zone as the mainland.The Singapore Government has been careful to avoid giving the Chinese leadership the impression it is actively tryi
224、ng to attract this flow.There has been a flow of money coming down from Hong Kong to Singapore,but I do not believe Singapore has been actively promoting this.That said,ethnic Chinese Singaporeans who provide financial services and who have strong relationships in China are marketing Singapore like
225、crazy,and they are pushing their clients to switch custody from Hong Kong to Singapore.Though not specifically aimed at winning business from Hong Kong,the Singapore authorities have improved the competitive position of their asset management industry through the introduction of the variable capital
226、 company(VCC).A VCC is a corporate structure applied to collective investment schemes.When investments are made,shares are created and vice versa,mirroring open-ended funds in the U.S.and Europe.VCCs are very useful for wealth managers seeking to service family offices with segregated client account
227、s.”How do you feel about the poor performance of regional stock markets over the past year?“China has been through an extraordinary period of growth,which has lifted an unbelievable number of people out of poverty.WTO membership brought an extended period of stability and an influx of foreign capita
228、l with a long-term investment horizon.But China did not always fulfil its WTO obligations.Access to its domestic market was restricted and problem strategic industries were supported by the state.Hence,the tension with the U.S.But,nonetheless,some forecasters believe China will be the worlds largest
229、 economy by 2030.Singapore:The view from the topThe Asia-Pacific Family Office Report 2022Page 33 of 84It is now an industrialized nation.Two-thirds of the population live in cities,and they are well-educated.At the moment China depends on the U.S.,Europe and the rest of Asia to buy their goods and
230、services.What they really need to do is develop their own domestic market so that growth becomes self-perpetuating.Once that happens,China could well overtake the U.S.Currently political issues make owning Asian equities a difficult trade.We take some comfort that global equities are trading at hist
231、orically high price to book multiples while Asian equities are at historically low valuations.Global equities are trading at a very high price to book on a historic basis,and Asian equities are trading at a very low price to book.Part of that is due to China,since it is such a big component of Asian
232、 equities.However,other Asian equities look very cheap on this basis.Im not that concerned by the Chinese property market.I think,ultimately,it comes down to the banking system,and China still has a closed capital account and state directed banking system.Policymakers can socialize the losses throug
233、h the banking system,and this will have an impact on money supply.Coupled with lockdowns this is negatively impacting economic growth.Having said that,I am concerned from the perspective of being a foreign investor.The problem is that whether you are a provider of equity or credit,you are subordinat
234、ed to local capital providers.There have only been a handful of companies that have been successful in enforcing their domestic rights.”Isnt there too much debt in China?“There is probably too much debt everywhere.Im worried about all markets where leverage is high,interest rates are rising,and the
235、economy is stagnating.But which sector of the economy is the most highly leveraged?Is it private individuals,corporates,or government?Government debt levels were at unsustainable levels going into the pandemic and were much worse coming out.More concerning,during the pandemic they adopted a monetary
236、 policy approach to solving all the problems,which was just printing money.And now weve got the U.S.with debt more than GDP and certain Western economies with debt of 120%to 130%of GDP.And theres narrative about how these countries need to stamp down on inflation.But they cant afford to do this beca
237、use inflation reduces the real cost of debt.The holder of government debt sees its real value fall,whilst the government actually benefit.So permitting inflation is the default option for many governments.In consequence,I dont think authorities are going to clamp down on inflation by pushing rates u
238、p to extreme levels.The principal causes of current inflation include Covid-19-related supply chain issues in China and energy-related input costs due to the war in Ukraine.Lockdowns have had a dramatic impact on Chinese economic activity and supply chain issues have permeated through the system,rai
239、sing the cost of shipping,fuel,logistics,everything.This has global ramifications.So,I dont think that raising interest rates is going to make any difference whatsoever to controlling that inflation.All its going to do is just impose more suffering on western consumers.”I hope your analysis is right
240、 because it points to inflation looking a lot better in 2023.“Well,thats certainly what policymakers are hoping.Chinas zero Covid-19 policy will lift at some point,the country will get back to producing again,and I think this will cause inflation to fall.Im not saying that loose monetary conditions
241、havent been responsible for some of the inflation weve been seeing;you cant increase supply by 30%and not see an impact in either asset price inflation or consumer price inflation.But the biggest factor contributing to inflation is supply chain bottlenecks.The good news is that some of these supply
242、chain issues are beginning to ease,as evidenced by declining shipping container rates and natural gas prices.”Page 34 of 84The Asia-Pacific Family Office Report 2022Real estateStaying close to homeDirect real estate investment is only 10%of the aggregate AUM of Asia-Pacific family offices,but 78%own
243、 a property portfolio(Figure 2.13).The split of portfolios is fairly even between commercial and residential,very close to the composition of family offices globally(Figure 2.14).More than half of commercial and residential developments are in close proximity to the family office,demonstrating the i
244、mportance of understanding local market conditions in the investment process.But Asia-Pacific family offices are more likely to invest cross-border than in a different region within their own market.Figure 2.13:Whether the family office invests in real estateYes76%Yes31%No69%No80%Yes20%GlobalEuropeA
245、sia-PacificNorth America Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 24%NoNo78%Yes22%Figure 2.14:Composition of family offices real estate portfoliosLocal (Commercial)33%27%Local (Residential)26%22%Regional (Commerci
246、al)9%19%Regional (Residential)3%16%International(Commercial)10%8%International(Residential)19%8%GlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 2021 real estate returns prove somewhat flat2021 returns
247、from Asia-Pacific real estate portfolios look rather flat alongside the global average(Figure 2.15).But the global average is the product of exceptional capital appreciation in the U.S.fueled by loose monetary policy;nationally,residential home prices increased 19%4.By contrast,key Asia-Pacific prop
248、erty markets have been lackluster,a condition which,excluding Singapore,has continued into the current year.“China has seen a near 10%decline in residential property prices this year.Hong Kong has suffered too,but not quite to the same extent.This is mainly due to the zero Covid-19 policy.It will ta
249、ke time,but these markets are expected to recover as lockdown measures ease.”Chief Executive Officer,multi-family office,Hong Kong“In some segments of Indian real estate,such as high-end residential,there is an oversupply.There are no buyers and processes are stagnant.Developers have had to change t
250、heir view and start constructing middle-and low-income housing.”Director and family member,single family office,India “Singapores residential market has remained very strong this year.Supply is tight because of construction delays during the pandemic while demand has been boosted by an influx of peo
251、ple leaving Hong Kong.This includes many very wealthy families.The upshot is a double-digit increase in the rents of high-value residential property.”Chief Executive Officer,single family office,Singapore 2.3 Asset class focus4 US National Home Price YoY%change,US Bureau of Labor Statistics,https:/w
252、ww.bls.gov/Page 35 of 84The Asia-Pacific Family Office Report 2022Figure 2.15:Family offices average 2021 return from real estate investments by asset classGlobalAsia-Pacific Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Local(Commercial)7%11%Local(Residential)9%13%
253、Regional(Commercial)3%11%Regional(Residential)5%13%International (Commercial)3%6%International(Residential)9%8%Residential property most popularResidential homes/apartments are the most popular type of real estate investment while the mix of commercial portfolios is conservative.Proportionately fewe
254、r Asia-Pacific family offices invest in the more esoteric sectors of the property market,such as industrial and logistics,hotels,or senior housing,when compared with the global average(Figure 2.16).Figure 2.16:Percentage of family offices with real estate investments by sector GlobalAsia-Pacific Not
255、e:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Residential homes/apartments72%80%Hotels11%32%Industrial&logistical28%48%Retail25%35%Offices36%52%Leisure19%17%Senior housing&care3%20%Page 36 of 84The Asia-Pacific Family Office Report 2022P
256、rivate equityDirect active approach works bestWith 83%of Asia-Pacific family offices investing in private equity(up from 80%last year),it stands out as the second-largest asset class,comprising on average,23%of AUM(Figures 2.5,2.17).There is a preference for investment through funds(44%),but direct
257、investment is still 47%of portfolios,which is similar to the global average of 49%(Figure 2.18).This table also shows that with the majority of their direct investments,Asia-Pacific family offices are prepared to take an active role,advising and mentoring management and giving them access to the fam
258、ily network.Figure 2.17:Whether the family office invests in private equityYes88%Yes88%GlobalEuropeAsia-PacificNorth America Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 12%No12%No90%YesNo10%83%YesNo17%As in prior yea
259、rs,active management produced the best investment returns,both for Asia-Pacific family offices and family offices globally.But overall returns of Asia-Pacific family offices were significantly lower than those achieved globally,which benefited from surging U.S.stock market valuations and buoyant exi
260、t activity.This is evidenced by both the returns data in Figure 2.18 and,with the exception of direct active investment,the limited number of Asia-Pacific family offices reporting returns outperforming expectations(Figure 2.19).“The expansion of private markets in Hong Kong has been driven by the po
261、or performance of the public market.Family offices are led by entrepreneurs and these entrepreneurs are always looking for private businesses in sectors which they understand.”Chief Executive Officer,multi-family office,Hong Kong“There are two factors which count against private equity as far as fam
262、ilies are concerned.First,its still possible to make good money in public markets at least until quite recently.Second,private equity is something of a black hole.You never know when you will get your money back.It could be an eight-or nine-year wait,and that could impact on a familys lifestyle.”Hea
263、d of single family office and family member,India“Weve had a handful of successful exits over the last 24 months.A very well timed liquidity event involving just one direct venture capital investment produced a very significant increase in family wealth last year.”Director,single family office,Austr
264、alia “Starting from a low base,private equity is becoming a more popular asset class for Indian family offices.A few years ago,it was only 1 or 2%of portfolios.For our family office its now up to 10%.There is more going on in private equity now and cash is being returned from older investments.”Head
265、 of single family office and family member,India“Were not keen on private equity.We would prefer to own quoted shares at a fair market value which have the ability to either reduce costs or pass on price increases to the end user.By contrast,a private equity fund will typically pay a 25%premium to t
266、ake something off market.Then they have to make it work.I think a lot of syndicated property and these kinds of vehicles are only possible with extreme low interest rates so that excessive gearing enables them to earn sufficient returns.”Chief Executive Officer and family member,multi-family office,
267、AustraliaPage 37 of 84The Asia-Pacific Family Office Report 2022ReturnsFigure 2.18:Family offices average private equity portfolio and 2021 returns by asset categoryPrivate equity funds Private equity fund of funds Direct-passive shareholder roleDirect-active management role 44%43%26%25%8%8%21%24%Pr
268、ivate equity funds Direct-passive shareholder rolePrivate equity fund of funds Direct-active management role 13%11%19%17%8%16%11%23%PortfolioGlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Figure 2.19:
269、Percentage of family offices reporting 2021 private equity performance outperforming,meeting,or underperforming expectationsGlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 OutperformedMetUnderperformed
270、Private equity funds 17%36%83%58%0%5%Private equity fund of funds 0%24%73%66%27%10%Direct-passive shareholder role8%25%77%61%15%14%Direct-active management role 50%43%29%41%21%16%Page 38 of 84The Asia-Pacific Family Office Report 2022Asia-Pacific family offices favour growth and venture capitalThe m
271、ost attractive category when selecting private equity investments(Figure 2.20)is growth,either direct(54%)or through funds(66%).Venture capital investment in early-stage innovative businesses,typically although not exclusively technology-based,is also popular(49%),as is direct seed investing in star
272、t-ups(40%)and direct investment in real assets(49%).Buyouts(14%)and other special situations(14%)are not popular with Asia-Pacific family offices.Figure 2.20:Percentage of family offices with exposure to private equity investing directly or through funds in the relevant categories Venture-Direct inv
273、estmentsGrowth-Direct investmentsSpecial situation-Direct investmentsVenture-FundsGrowth-FundsSpecial situation-FundsAngel/Seed-Direct investmentsBuyout-Direct investmentsPrivate debt-Direct investmentsReal assets(e.g.land,real estate)-Direct investmentsAngel/Seed-FundsBuyout-FundsPrivate debt-Funds
274、Real assets(e.g.land,real estate)-Funds49%54%14%49%54%26%20%23%43%29%22%38%32%33%51%66%26%53%64%29%40%14%20%49%33%28%23%43%GlobalAsia-Pacific Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022“I think the supply of capital into Asian ventu
275、re capital markets is not broad enough and economies are poorer for it.Hence theres a massive opportunity for venture capital in Asia,particularly given the huge entrepreneurial endeavour in this part of the world.”Vice Chairman,single family office,Singapore“In the UK,there are many investment inst
276、itutions which provide equity finance to small and medium sized businesses.In Hong Kong these types of funding through unit trusts,or through a junior market like Londons Alternative Investment Market dont exist,and so small and medium-sized businesses look towards family offices as a major source o
277、f funding.”Chief Executive Officer,multi-family office,Hong KongThe majority of Asia-Pacific family offices engaged in private equity run between five and 10 transactions at the same time.There are proportionately fewer Asia-Pacific family offices with more than 10 deals in operation and as a result
278、 the average Asia-Pacific portfolio is smaller than the global average(Figure 2.21).Figure 2.21:Number of private equity deals run in parallel by family offices1-411-1521+5-1016-20Average number27%15%3%52%3%825%14%13%38%9%10GlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden W
279、ealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Page 39 of 84The Asia-Pacific Family Office Report 2022Direct investmentFamily offices still enthusiastic but caution requiredJust over 70%of Asia-Pacific family offices are engaged in direct investing and our survey reveals that
280、 interest in this asset class is increasing,most probably because of the double-digit returns achieved in 2021.(Figures 2.18,2.22,2.23).Figure 2.22:Whether the family office makes direct investmentsYes23%No77%No76%Yes24%Yes19%No81%No71%Yes29%GlobalEuropeAsia-PacificNorth America Note:Figures may not
281、 sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 But stock markets have rolled over and major developed economies are on the cusp of a recession.What happens in public markets will eventually impact private markets and with a more difficult
282、environment in prospect,it remains to be seen whether this enthusiasm will persist.Figure 2.23:Whether the familys interest in direct investment increased,stayed the same or decreased over the last 12 monthsIncreasedStayed the sameDecreased49%40%11%IncreasedStayed the sameDecreased43%39%17%GlobalAsi
283、a-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Co-investmentTechnically,an equity co-investment is a minority interest acquired by an investor in conjunction with a private equity fund manager and funded throu
284、gh an independent co-investment vehicle5.However in this report the term is also used more broadly to refer to family offices which invest alongside other family offices.The advantage of both types of co-investment structure is that it enables a family office to obtain a larger share of a desirable
285、investment with less due diligence.These positives were referred to by respondents to our survey and explain why co-investments are 32%of the typical Asia-Pacific familys private equity portfolio(Figure 2.24).Less popular are club deals,which involve the acquisition of a controlling interest by diff
286、erent private equity firms acting collectively.“A lot of the direct deals we do are in partnership with a manager through co-investing opportunities.Either we will own the stock directly ourselves,or through a segregated special purpose vehicle.This iteration,over time,has enabled us to do more dire
287、ct investing.”Director,single family office,Australia “At any one time we might have a handful of investments of meaningful size,and then another handful of mid-size and then quite a long tail of venture capital tiddlers.Here,we will typically be co-investing so were not entirely responsible for the
288、 due diligence.Rather,we are leveraging off the due diligence of venture capital managers.”Director,single family office,Australia Figure 2.24:Breakdown of family offices average direct investment portfolio by type of investmentMajorityOtherClub deals16%9%5%Co-investments32%37%18%4%8%GlobalAsia-Paci
289、fic Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Minority37%34%5 https:/ 40 of 84The Asia-Pacific Family Office Report 2022For both Asia-Pacific family offices and family offices globally,some 70%of respondents report
290、 that their own family networks are the primary source of new private equity investment(Figure 2.25).Family offices that have established themselves as major private equity investors act as magnets attracting aspiring entrepreneurs.Networks of family offices(67%)and professional advisers(63%)are als
291、o important sources of new deals,but interestingly not the banking system(17%).“We have a dedicated team for direct investment.Originally it was organized around a handful of verticals,including renewables and green tech.But we are moving away from that,and our aim is to support entrepreneurs who we
292、 trust,its not restricted to specific sectors.We look for businesses where a real competitive advantage can be established and low valuations.”Chief Executive Officer,single family office,Singapore“We wont make an investment,no matter how good it looks,unless it comes to us through someone in our ne
293、twork that we know and trust or through a co-investment manager that we know and trust,or that we have a particular edge assessing it.Its really a function of where the deals come from,and where we have an edge,and where we know people,and who we know we can trust.Thats generally how it works.”Chief
294、 Executive Officer,multi-family office,Hong Kong“We have over a decade of experience of private equity investment into sustainable businesses projects.We could monetize this by overlaying a co-investment strategy on our direct investment mandate.This could provide us with the opportunity to generate
295、 external revenues by managing third-party capital.”Vice Chairman,single family office,SingaporeFigure 2.25:Where direct investments are sourced Network of family offices75%64%Self-generated70%Network of professionals(e.g.investment or private bankers,lawyers)63%61%Friends and family58%53%25%23%Fami
296、lys operating business46%43%Network of founders21%Consultants17%15%BanksGlobalAsia-Pacific Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 67%17%Page 41 of 84The Asia-Pacific Family Office Report 2022Direct investment in new technologie
297、sThe most popular industries for direct investment are healthcare and life sciences(65%of family offices with direct investments),consumer internet(48%)and fintech(43%)(Figure 2.26).Compared to family offices globally,Asia-Pacific family offices appear to prefer consumer internet and frontier techno
298、logy,but are relatively indifferent to energy and resources.Figure 2.26:Percentage of family offices having direct investments,with direct investments in the following technologies Healthcare and life sciences65%56%Fintech43%44%Consumer internet48%32%Enterprise software35%34%Frontier technology26%17
299、%Data26%27%Construction/engineering26%19%GlobalAsia-Pacific Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Other30%38%Energy and resource innovation22%34%Sustainable investingESG embedded in the investment processSustainable investing
300、involves consideration of environmental,social,and governance(ESG)factors in the investment process.There are three distinct sub-approaches which can be used individually or in combination;1)exclusion-excluding investments that are not aligned with the investors values;2)integration-incorporating ES
301、G factors into traditional investment processes;and 3)impact investing investing with the intention of generating a measurable environmental or social impact.All three approaches should nonetheless provide a competitive financial return.Global ESG assets are expected to exceed US$41 trillion during
302、2022,or roughly one third of all AUM6.Approximately half this total is in North America,and one third in Europe,leaving around 15%for Asia-Pacific and Japan7.However,in terms of UHNW family engagement,our survey points to North America lagging behind Asia-Pacific,which in turn lags behind Europe(Fig
303、ure 2.27).Sustainable investing:42%of Asia-Pacific family offices onboardForty-two percent of Asia-Pacific family offices include sustainability considerations in their investment process,and the percentage of sustainable investments within their portfolios is 29%.This represents a four percentage p
304、oint increase on last year,and is two percentage points higher than the global average.Participants expect the percentage of their portfolios dedicated to sustainable investing will expand dramatically over the next five years to 50%(Figure 2.28).Figure 2.27:Whether the family office is engaged in s
305、ustainable investingYesYes53%34%NoNo47%66%No37%Yes63%No42%Yes58%GlobalEuropeAsia-PacificNorth America Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 6 Global Sustainable Investment Alliance fifth Global Sustainable Inve
306、stment Review,http:/www.gsi-alliance.org/wp-content/uploads/2021/08/GSIR-20201.pdf7 Bloomberg Intelligence,https:/ 42 of 84The Asia-Pacific Family Office Report 2022Figure 2.28:Approximate percentage of investment portfolio allocated to sustainable investments in 2021 and 2022,plus expected allocati
307、on in 12 months and five years time2021 Actual2022 Actual2023 Expected2027 Expected25%29%38%50%24%27%32%38%GlobalAsia-Pacific Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022“We have two arms,a traditional balanced investment portfolio holding stocks,bonds,private equi
308、ty,and venture capital,and a change arm.The former generates returns which then enables the other arm to initiate environmental projects aimed mainly at urban rejuvenation.Though the projects are generally not-for-profit,we would like them to be self-sustaining so that we do not have to keep funding
309、 them.”Chief Investment Officer,single family office,New Zealand“When we invest directly in reasonably mature businesses,like sustainable fashion,we can persuade management to reduce waste or source raw materials responsibly.The environmental outcome is probably better than from interesting but flaw
310、ed impact investments like insect farming or solar panels in African villages.”Chief Executive Officer,single family office,Singapore“It is difficult to measure the success of impact investing if the target is something like emissions reduction or biodiversity.But the most difficult thing we come up
311、 against is the amount of resource required to monitor and support small projects.When you have an employee working virtually full-time on the project you wonder if it makes sense.”Chief Financial Officer,single family office,Australia“I have a problem with ESG.Investors want to buy shares in electr
312、ic car manufacturers but want to divest from mining.But to manufacture batteries for EVs you need nickel,lithium,and cobalt,so ESG is contradictory.We have our own metrics for responsible investment.Its imperative we have our own views on that and are not forced to adhere to some ill-conceived pre-e
313、xisting standard.”Vice Chairman,single family office,SingaporeOver half of families believe they should be doing moreSupporting the notion that sustainable investing will continue to grow in Asia-Pacific,over half(53%)of families reportedly believe they are not currently investing enough in this spa
314、ce(global average 33%)(Figure 2.29).Figure 2.29:Whether the family believes it has invested enough in sustainable investmentsYes33%No67%No47%Yes53%GlobalAsia-Pacific Note:Figures may not sum to 100%due to rounding.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Averag
315、e sustainable return at 10%Sustainable investing should provide a competitive financial return but this need not necessarily be the optimal financial return.For Asia-Pacific family offices in 2021,the return from sustainable investments of 10%matched the average investment portfolio return(Figures 2
316、.12,2.30);consequently,returns were both competitive and optimal.“In order to get the impact,do we need to sacrifice financially or not?What are the metrics were measuring?And how do we ensure that the impact being achieved is exactly what it says on the tin?”Chief Investment Officer,single family o
317、ffice,New Zealand Figure 2.30:Family offices average annual return on sustainable investments in 2021 and expected return in 2022Sustainable investments-2021 IRRSustainable investments-2022 expected IRR10%10%11%11%GlobalAsia-Pacific Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office
318、 Report 2022 Page 43 of 84The Asia-Pacific Family Office Report 2022Thematic investment is the most popular approachThere are a number of different approaches to sustainable investing.The most popular,thematic investing has been adopted by 76%of Asia-Pacific family offices which have committed to su
319、stainability(Figure 2.31).Under this approach investors select a relevant theme and seek to identify,and invest in,technologies capable of delivering environmental and/or social benefits relevant to that theme,as well as provide a financial return.Positive/best in class selection,which restricts inv
320、estment to companies that meet a defined ESG hurdle(35%),and integration of ESG factors into the investment process(29%)are also popular approaches.Thematic investing(e.g.clean energy,gender equality,healthcare,water,etc.)Positive/best in class selectionIntegration of ESG factors into analysis and v
321、aluationNegative/exclusion based screening(e.g.no tobacco,alcohol,controversial weapons)Active engagement(i.e.using shareholder rights to influence management on ESG issues)Figure 2.31:Sustainable investment approaches used by family offices 76%73%35%40%29%49%29%43%29%24%GlobalAsia-Pacific Note:Mult
322、iple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 The most popular sustainable investment theme is climate changeClimate change(71%)is the most common theme adopted by family offices engaging in sustainable investment,followed by health and social
323、 care(53%)(Figure 2.32).Noticeably Asia-Pacific family offices appear more concerned about the fair treatment of employees(41%)and responsible sourcing of products(41%)than their global counterparts,but less concerned about waste disposal(35%)and water technology(29%).Figure 2.32:Main focus of famil
324、y offices sustainable investments Climate change(e.g.carbon footprint management,wind and solar energy/renewable energy)71%70%Knowledge and technology(e.g.improve business productivity,education materials,advanced material science)41%35%Water(e.g.improve fresh water supply,manage water consumption)2
325、9%54%Products and services(e.g.source responsibly,contribute to society)41%33%Health(e.g.improving health,social care)53%57%Governance(e.g.fair and transparent executive pay,board independence)18%28%Pollution and waste(e.g.reduce packaging/waste and reliance on landfill sites,limit toxic emissions)3
326、5%50%Ethics(e.g.pay fair share of taxes,do not engage in anti-competitive practices)18%28%People(e.g.retain and develop employees,look after staff throughout the supply chain,workplace safety)41%35%GlobalAsia-Pacific Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacif
327、ic Family Office Report 2022 Page 44 of 84The Asia-Pacific Family Office Report 2022Its not all altruism Both Asia-Pacific(65%of respondents)and family offices globally(71%)recognize their responsibility to make the world a better place,and this is their primary motivation for sustainable investing(
328、Figure 2.33).Both sets of family offices are keen to demonstrate that their wealth can be used to create positive outcomes(53%and 55%respectively),and this is perceived as a more compelling reason to embrace sustainability than next generation influence(35%and 33%respectively).But for 65%of Asia-Pac
329、ific family offices,engagement with sustainability also provides an opportunity to investigate new sectors,industries,and technologies which could be the source of attractive investments in the future.Investment managers are family offices primary source of information on sustainable investing(Figur
330、e 2.34).But 29%of Asia-Pacific family offices also rely on the advice of other family offices,reflecting the importance of co-investing.Figure 2.34:Sources of advice on sustainable investing Investment managers53%60%Other family offices29%30%Industry groups41%31%GlobalAsia-Pacific Note:Multiple opti
331、ons permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Consultants41%37%Friends/family47%31%Figure 2.33:The familys motivations for sustainable investing Responsibility to make the world a better place65%71%A desire to leave a legacy41%29%Show that family wealt
332、h can be invested for positive outcomes53%55%Passion for a specific cause18%24%A shift in awareness about the importance of sustainability47%46%Influence from the next generation35%33%Increased availability of sustainable investment opportunities29%36%Identify new sectors,industries,or opportunities
333、 for investments65%36%Belief that better investment returns and/or lower risks will result from incorporating sustainability considerations35%35%GlobalAsia-Pacific Note:Multiple options permitted.Campden Wealth/Raffles Family Office,The Asia-Pacific Family Office Report 2022 Page 45 of 84The Asia-Pacific Family Office Report 2022Between three and five banking relationships is the norm Most family