GLOBAL family offices are booming, with significant growth in North America and the Asia-Pacific (Apac) region expected in the next six years.
Total estimated family wealth stands at US$5.5 trillion currently, up 67 per cent from US$3.3 trillion five years ago, based on Deloitte’s report released on Wednesday (Sep 4).
It is projected to grow 73 per cent to US$9.5 trillion in 2030, and family office wealth in Apac is expected to double to US$2 trillion.
In North America, the total estimated wealth of families with family offices now stands at US$2.4 trillion, and is expected to grow 71 per cent to US$4 trillion by 2030.
Rebecca Gooch, global head of insights for Deloitte Private, said that there are now more than 8,000 family offices worldwide, from just over 6,000 family offices in 2019, based on survey estimates.
“We project it to grow to 10,700 family offices by 2030, so that’s a 75 per cent increase over this decade (or so),” she noted.
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While North America has been the fastest-growing region until now, it is expected to be outpaced by Apac, said Deloitte. It surveyed 354 single family offices, 89 of which are from Apac.
By 2030, the number of family offices in Apac is expected to grow 40 per cent to 3,200 offices, while the number in North America is expected to rise 32 per cent to 4,190.
These family offices’ average assets under management (AUM) stand at US$2 billion, and the average AUM of family office in Singapore is US$1 billion, Dr Gooch noted.
“Family offices will continue to gain influence in financial markets as their AUM rise,” said Deloitte, which projects their AUM to grow to US$5.4 trillion by 2030, from US$3.1 trillion today.
Meanwhile, the report finds that 90 per cent of family offices serve first (41 per cent), second (30 per cent), and third-generation (19 per cent) families, with 68 per cent of all offices being established after the millennium.
“The face of wealth is really being redefined by new money, and I see that there’s so much new wealth in Asia-Pacific spurring this rapid hike in family offices,” said Dr Gooch.
Some 60 per cent of family offices in Apac were set up after 2009, based on the report.
It also revealed that just three in 10 family offices currently cater to those who have surpassed the second generation.
“Two factors could be at play – it could be that wealth holders are losing their fortunes and/or that the explosion in new wealth is dwarfing that of old wealth.
“Irrespective of which is the case, given the many challenges families face in retaining their wealth long term, it is fitting that so many are now turning to family offices to steward them through generational transitions,” said Deloitte.
