Single family offices in Asia are increasingly branching out from direct investments, as they rethink work processes, diversify into more adventurous assets and find ways to work around Covid-induced travel restrictions.
Family offices have recently delved into more adventurous assets such as crypto, blockchain and other private equity investments. To invest in new asset classes, family offices could hire and manage those assets internally, or they could tap external expertise and co-invest with fund managers. At the start of the pandemic, Tsangs Group chose to move into the latter when investing in areas such as cryptocurrencies, blockchain and biotech.
Another senior executive at a Hong Kong-based single family office (SFO) agreed that SFOs like hers choose the co-investing mode when they seek to diversify their portfolio, and that it is a stepping stone for many to eventually make direct deals in a new market.
“A lot of people tried to do a lot of things on their own in the old days. A lot of entrepreneurs believed that if they hire the best fund manager to work in my family office, they were done,” she said. “As people realise that they need more expertise and more diversification, family offices in general will be much more open to working with partners of all sorts. That is also a new trend that we are seeing in the past decade.”
The asset management industry in Hong Kong believes the city's new leadership should have two top objectives to help Hong Kong retain its competitiveness as an international financial centre: less stringent restrictions on international arrivals, and the liberalisation of how various market connect schemes with mainland China work.
“Different industries, including the fund management industry, have been battered by the Covid and travel policy,” said Sally Wong, chief executive officer of the Hong Kong Investment Funds Association (HKIFA).
“The fund industry would exhort John Lee’s government to put the act together so as to help the fund industry regain its competitiveness and propel it to the next level,” Wong told AsianInvestor.
The Monetary Authority of Singapore (MAS) recorded an overall loss of S$7.4 billion ($5.3 billion) for the financial year that ended on March 31, citing lower investment gains, currency appreciation, and higher interest expenses.
Investment gains were S$4 billion, down from S$22.8 billion from the last financial year. In addition, the appreciation of the Singapore Dollar led to a negative foreign exchange translation effect of S$8.7 billion, the regulator announced in its annual report on Tuesday (July 19).
The Singapore Dollar strengthened 4% against the Pound Sterling, 5% against the Euro, and 9% against the Japanese Yen, it said.
Additionally, total expenditure increased to S$2.8 billion, attributed to higher interest expenses on domestic money market operations.
The overall loss marks the central bank's first in nine years, according to the Straits Times.