Family Office & RIA Weekly Roundup | 9.26.24 | Volume 122
Volume 122
09/26/2024 (5 Min. Read)
Investors Eye Asia and Family Offices Shift Gears Towards Private Equity and Digital Currency in this Week's Edition...
Take a Lap Around the Industry
Wealth Shift to Asia Drives DBS's Goal to Double Fees by 2027
DBS Group Holdings Ltd. is targeting a doubling of its wealth management fees by 2027, driven by an influx of affluent investors shifting their assets to Asia. Last year, DBS's income from wealth management surpassed S$2 billion ($1.5 billion), doubling since 2015, and the bank anticipates a similar pace of growth as more family offices and wealthy individuals seek trust and legacy planning services in the region. DBS’s head of consumer and wealth banking, Shee Tse Koon, emphasized that the bank's expansion aligns with the growing demand for wealth services from regions such as North Asia, the Middle East, and Europe. With assets under management expected to surpass S$500 billion by 2027, the bank has significantly increased its relationship manager headcount. However, DBS also faces challenges in maintaining robust anti-money laundering practices, especially following fines related to lapses in compliance. The bank continues investing in technology and staff to safeguard its reputation and manage risk effectively.
"Given the trajectory and traction we have had over the past years, our aim going forward is that by 2027 we want to double our wealth fees.”
Shee Tse Koon (DBS)
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Greater China Leads Asia-Pacific ETF Growth Amid Rising Demand
Greater China has emerged as the leading force in the Asia-Pacific region's exchange-traded fund (ETF) market, driven by strong investor demand and substantial net flows. According to a report by Brown Brothers Harriman, Hong Kong, Taiwan, and mainland China accounted for $102 billion in net ETF flows in the first half of this year, representing 70% of the region's total flows. As of mid-2023, combined ETF assets in Greater China reached $557 billion, making up 38% of the region’s total ETF assets. The report shows that institutional investors in Greater China are expected to further increase their adoption of ETFs, particularly in Taiwan and mainland China. While Taiwan and Hong Kong's ETF markets are seeing retail-driven growth, China's market has been bolstered by state-backed inflows, especially in broad-based equity products. Despite challenges in distribution channels, the ETF market in Greater China continues to see diversified growth through active, thematic, and multi-asset strategies.
"I think the China onshore ETF market has been growing rapidly, even pre this kind of intervention initiative that has been happening.”
Chris Pigott (Brown Brothers Harriman)
Global Investors Flock to India Amid Rapid Economic Growth and Sectoral Opportunities
India's rapidly expanding economy and diverse investment opportunities are drawing increased interest from Western financial institutions in 2024. With its GDP growth of 7.8% in 2023, outpacing China's 5.2%, India is becoming a favored market for global investors. Research by Standard Chartered shows that 31% of banks, investment managers, and asset owners from Europe and the Americas now prioritize India in their development plans. Investors are particularly drawn to the country’s booming manufacturing, infrastructure, and consumer goods sectors, as companies like Apple relocate production to India and the government provides substantial incentives. Supply chain diversification from China, coupled with India’s growing consumer market and increasing investment in renewable energy, further enhance its appeal. While India faces challenges in decarbonization, its renewable energy sector offers strategic opportunities for Western investors looking to support sustainable infrastructure projects and capitalizing on emerging market growth.
“Our clients are increasingly drawn to India's long term economic prospects, highlighting its exceptional growth trajectory, vibrant digital ecosystem and significant reforms.”
Nicolo Salsano (Standard Chartered Bank AG)
Family Offices Shift From Cash to Private Equity, AI, and Digital Assets in 2024 Investment Surge
Family offices are displaying their most bullish outlook in years, driven by a mix of declining interest rates and a renewed appetite for higher-risk investments. According to Citi Private Bank’s 2024 Global Family Office Survey, 97% of family offices expect positive returns this year, with nearly half predicting double-digit gains. This marks a shift from the cash-hoarding stance of recent years as they increase their allocations to private equity, developed-market equities, and fixed income. Private equity, in particular, stands out, with 47% of respondents planning to raise their exposure over the next 12 months. AI has emerged as a key investment theme, with over half of family offices already exposed to the sector through various channels. While crypto remains less in comparison, only 17% of family offices have allocated funds to digital assets, showing a cautious approach to the space. Despite the optimism, concerns about interest rates, U.S.-China relations, and market overvaluation persist.
"Family offices are taking money out of cash, and they’ve put money into public equities, private equity, direct investments and also fixed income. But primarily it’s going into risk-on investing."
Hannes Hofmann (Citi)