Asia Pacific is predicted to outpace its Western counterparts to become the fastest-growing region for family offices by 2030, according to a report released by Deloitte on Wednesday.
Single-family offices in the region are expected to grow by 40% to 3,200 over the next six years, while North America is expected to rise by 32% to 4,190 offices. Asia Pacific’s market is heating up given its more recent emergence as a hub for family offices, the Deloitte Private report said.
The growth of family offices in North America, on the other hand, is expected to be slower given the relative maturity of the market. Similar is the case for Europe, which is forecasted to grow at a slower pace than the other two regions, per the report.
North America and Asia Pacific will also experience growth in family wealth gain, according to the data. In Asia Pacific, the total estimated wealth of families with family offices stood at $1 trillion, with their wealth projected to nearly double by 2030 to $2 trillion. In North America, family offices control $2.4 trillion and are expected to grow by 71% to $4 trillion.
The region has been stepping up its efforts in luring the wealthy to establish family office bases and manage their riches. The most popular hubs have been Hong Kong and Singapore, with the former luring high-net-worth individuals (HNWIs) with tax breaks and investment visas, while the latter has been stepping up regulations after seeing a vast inflow of family offices.
In the Middle East, the family office space can best be described as “nascent”, as the region is estimated to hold a mere 290 fully functional single-family offices, expected to increase by 21% in the next six years.
Family offices in North America have total estimated assets under management (AUM) at $1.3 trillion, followed by Europe at $949 billion, Asia Pacific at $590 billion, and the Middle East at $159 billion.
Globally, the number of family offices is expected to grow by one-third from 8,030 today to 10,720 in 2030, with $9.5 trillion of wealth between them, up from $5.5 trillion currently.
“Given the large-scale projected rise in wealth and family office AUM, this could have a considerable impact on the family office arena. For instance, the competition for highly skilled talent could further intensify, alongside greater demand for third-party service provision to support the growth in family office activity,” according to the report.
The report also said that over one-quarter of family offices now have multiple branches. When setting up their secondary branch, nine in 10 family offices in North America and Europe stuck to their region. However, more than half of the family offices in Asia Pacific went abroad to set up secondary branches.
“When it comes to family offices’ geographic expansion, there appears to be a move toward rising insularity among those in North America and Europe…” the report said. “Those in Asia Pacific are, however, bucking this trend and rapidly internationalising.”
