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Offices around the world surveyed by Campden Wealth and Swiss bank UBS posted an average return of 5.4 percent during a 12-month period from the first half of 2018 to the first half of 2019.
Family offices (investment firms managing money for the ultra-rich) saw their average returns being negatively affected by market turbulence and heightened geopolitical tensions, reported The Straits Times.
Offices around the world surveyed by Campden Wealth and Swiss bank UBS posted an average return of 5.4 percent during a 12-month period from the first half of 2018 to the first half of 2019. The figure is down from the 15.5 percent average returns recorded the previous year.
A majority of the 360 respondents anticipated a downturn to begin next year.
UBS estimates that 100 to 120 formalised family offices having an average of US$467 million (S$645 million) in assets under management, exist in Singapore, with 20 of them participating in the survey.
“Family offices are cautious about geopolitical tensions, and there is a widespread sense that we’re reaching the end of the current market cycle,” said Dr Rebecca Gooch, Campden Wealth director of research.
“While the average family office hasn’t made wholesale changes to its portfolio, many have been deleveraging their investments in anticipation of disruption ahead,” she added.
According to UBS, family offices in the country posted average returns of 5.2 percent over the past year, mostly in line with the global average of 5.4 percent and Asia-Pacific average of 6.2 percent.
“We continue to witness a strong and rising trend among Asian family offices to allocate their investments to private markets and real estate over the years. Given the strong preference of Asian families for real estate and given their entrepreneurial roots, this doesn’t come as a surprise to us,” said Anurag Mahesh UBS Global Wealth Management head of global family office Asia-Pacific.
The survey also revealed that Asia-Pacific family offices have increased their efforts to transfer their wealth to the upcoming generation. Nearly half of the family offices in the region currently have succession plans in place.
The average age of a Singaporean successor is 39, while the average age of an Asia-Pacific successor is 41. Relative to this, close to half of the Asia-Pacific respondents believe an age limit to succession should be set.
“Legacy and succession planning is in the minds of many Asian families as we anticipate intergenerational wealth transfer happening in the next 15 years,” said Susan Sy, said UBS family advisory and philanthropy head for Asia-Pacific.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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