Europe has been the place where rich Middle Easterners have traditionally stored wealth, but their focus is shifting east, with Singapore a particular beneficiary, agreed a panel of wealth managers.
Speaking at the Asia-Middle East Investment Summit in Singapore last week, Terry Farris, head of family office services at DBS Private Bank in Singapore, says he expects 50% of his firm’s discretionary portfolio management to be on behalf of Middle Eastern wealth by the end of June.
The number of Middle Eastern clients setting up family offices in Singapore has doubled in the past year and will continue to grow as they focus more on Asia, adds Farris, who has long advised families on areas such as philanthropy.
“Following the Arab spring, [Middle Eastern individuals] are looking at how to diversify away from European and US banks and also diversify their asset types,” he says, with many choosing the Lion City for discretionary portfolio management.
Mark Smallwood, Asia-Pacific head of wealth management solutions at Deutsche Private Wealth Management in Singapore, notes that Singapore is becoming the destination of choice for much wealth globally.
“Booking is a very important facet of the strategy,” says Smallwood. “The stability of the booking platform is essential.”
Middle Eastern investors looking to invest in Asia should be looking to put capital in the region, he argues, because that is where the products are largely being managed, with Singapore well placed in terms of the opportunities it offers for sourcing investments.
The city-state is encouraging the shift to book assets there by luring family offices to set up there and making its external asset manager legislation attractive, particularly for exempt fund managers.
Moreover, it has developed a free port – effectively a bonded warehouse – at Changi airport that enables individuals to fly into the city and deposit gold bars or other items, meet clients and trade products, without having to enter the country.
Dubai, Qatar and Bahrain have all put in groundwork to become wealth-management hubs, says Smallwood, but “global banks need economies of scale to create a comprehensive product platform, so you need to concentrate your forces in key centres”, he argues.
The panellists also point to the fact that the non-resident Indian (NRI) client segment is a good indicator of where Middle Eastern money is likely to flow.
Smallwood notes that Deutsche PWM Asia-Pacific’s main service hubs for NRI clients are London, Switzerland, Dubai and Singapore. That footprint is similar to the coverage that Middle Eastern investors are looking for now, he says.