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The Family Office Insights Series – Asia Pacific Edition

The Top 10 Family Office Trends, 2024

A dynamic landscape demands a strategic approach. Family offices need sound investment strategies, tools to benchmark performance, and effective plans for succession. They also seek expertise in building teams, integrating technology, and aligning wealth with family values. To support family offices on their journey, welcome to Deloitte Private’s new Family Office Insights Series – Asia Pacific Edition.

The Family Office Insights Series – Asia Pacific Edition is the first of many perspectives we will publish as part of our new Family Office Insights Series which in 2024. This report highlights this year’s key trends in the areas of family office investing, risk management, hiring, sustainability, succession, digital transformation, cybersecurity, and more.

To identify these insights, we surveyed 354 single family offices from around the world, including 89 from Asia Pacific, between September and December 2023. Globally, these offices have an average asset under management (AUM) of US$2.0 billion, and the associated families have an average wealth of US$3.8 billion. In Asia Pacific, the average family office AUM stands at US$1.0 billion and average family wealth at US$2.1 billion.

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The Top 10 Family Office Trends video



The Top 10 Family Office Trends, 2024

Family offices in Asia Pacific are optimistic despite uncertain times, with 77% expecting to see their AUM grow in 2024, and 84% expecting to see a rise in the family’s wealth. With these gains in sight, roughly four in 10 family offices are looking to hire additional staff this year (43%), to increase the number of services they offer (38%), and to rely further on third-party outsourcing services (48%).

The top three perceived market risks in 2024 are a potential global recession (noted by 73% of Asia Pacific-based respondents), geopolitics (55%), and inflation (44%). In turn, 67% of respondents rank investment risk management as a top strategic priority for 2024, followed by investment governance and valuation policies (53%).

The top asset classes family offices in Asia Pacific invested in were equities (25%), private equity and direct lending (21%), real estate (19%), and fixed income (19%) in 2023, accounting for more than four-fifths (84%) of the average family office portfolio. The top asset classes they plan to increase their allocations to this year are developed market equities (32%) and real estate (31%).

Asia Pacific-based family offices allocate 32% of their average portfolio to investments outside their own region, and more than one in five plans on increasing their allocations to North America (23%) and Middle East-based (21%) investments this year.

Over half of family offices in Asia Pacific (52%) now engage in sustainable investing, and their portfolio share dedicated to sustainability is expected to nearly double over the next five years from 13% to 24%. The top themes family offices are allocating to are good health and well-being, clean energy and climate action.

Family offices in Asia Pacific are increasingly turning to outside talent for their recruitment needs, particularly within the C-suite. While 43% of family offices aim to shift toward more professional (non-family) staff in 2024, 31% say that an outside professional will lead the family office post succession, a notable increase from 22% today.

While 35% of family offices in Asia Pacific expect to undergo generational transition over the next decade, a notable 37% of families are currently without a succession plan. In turn, over a third (38%) of family offices have ranked succession planning as a top priority this year.

A notable portion of Next Gens will be undertaking leadership roles in the family office this year, such as that of a CEO (38%), board member (36%), manager/executive (30%), or director (21%). This comes as 69% of respondents claim that they expect a Next Gen to lead the family office post succession. That said, a notable proportion of family offices lack confidence in Next Gens’ ability to take over, raising concerns over their lack of qualifications (36%) and insufficient interest in the activities of the family office (23%). As a result, 33% say Next Gens’ core priority for 2024 is to receive mentoring/training, while 26% say it is to plan for succession.

Over half (53%) of family offices in Asia Pacific are developing or rolling out a technology strategy this year. This comes as nearly one in four (23%) identify inadequate investment in technology as a core family office risk, while nearly three-quarters (73%) admit they are either underinvested (33%) or only moderately invested (40%) in the operational technology needed to run a modern business.

Nearly a quarter (24%) of family offices in Asia Pacific have experienced a cyberattack over the last 12-24 months. However, more than a third (37%) of offices do not have a cybersecurity strategy in place, and 38% say they have a strategy, but it could be better. With roughly one in five family offices (18%) heralding cyberattacks as a core risk this year, now is the time for pre-emptive action, with 20% building out their cybersecurity strategy this year.

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