Family offices flourish in Asia
The rapid growth of family offices in Asia is leading to a hiring boom, but also prompting some to outsource services, including investment management.
The number of single-family offices in Singapore and Hong Kong has quadrupled since 2020 to around 4,000, and the two are home to about 15% of the world’s single-family offices, according to a report by McKinsey in September.
McKinsey said “competition for financial talent is intense in both Hong Kong and Singapore, and top talent is often drawn to hedge funds and investment banks, where the remuneration is higher than family offices typically offer”.
Both Singapore and Hong Kong have rolled out incentives to encourage family offices to set up shop. Before the incentives were introduced, many of Singapore's family offices mainly handled administrative functions, according to Paul Westall, co-founder of Agreus Group, a resources and recruitment consultancy focused on family offices, which opened a Singapore branch in 2022.
“Prior to that they might have an office in London, and set up representative offices,” he said. “In the last year we’ve seen them bring on more people. They can’t just hire family members, so that has pushed demand for hiring outside.”
According to Westall, a lot of early-stage family offices are using outsourced advisers but, as their assets grow, they are likely to hire more people and do more in-house.
Westall said that family office staff typically come from jobs in banking, private wealth or investment management, but the “cultural fit” is important, particularly as staff may need to work across several different functions – for example, a role might focus on investment, but occasionally require helping with licensing or operational elements – and communicate in ways that different members of the family can understand.
“Bankers tend to adapt better to family offices,” said a Singapore-based executive at an asset manager. “We do lose people to family offices, but they struggle with the lack of autonomy and they don’t last.”
Staff who move to family offices from larger organisations may also miss the defined hierarchy and path for career progression.
“It depends on the type of operation and the mentality,” said a Singapore-based banker. “If it’s a family office from the US West Coast, it’s probably a close fit for an investment banker and will have a similar approach to dealmaking. If it’s a billionaire who got Singapore citizenship and just wants to invest in ETFs, it’s not going to be very interesting.”
The costs of running a family office in Asia are higher than in the west, partly because of the need to operate across multiple jurisdictions.