Singapore, November 4, 2008 – A study led by VP Bank Group and the University of St. Gallen identifies key trends and characteristic in the evolution of the Asian Family Office market and projects its developments in 2015.
VP Bank Group, one of the largest banks in Liechtenstein, has commissioned the University of St Gallen, a leading Swiss University with a well-known and reputable Institute of Banking and Finance, to conduct an inaugural study on “Family Offices in Asia”. The findings were announced today at a press conference led by Mr Patrick Wild, Head of Private Banking Overseas, VP Bank Group, who will be presenting this study at the Private Banker International Wealth Management Summit 2008, held in Singapore on November 6-7.
Based on primary research findings gathered from a panel of experts from key Asian wealth markets, and secondary research into current literature, this study provides insights to the key question: What role do Family Offices play in Asia. The study covers eleven emerging economies in Asia (namely China, Hong Kong, India, Indonesia, Malaysia, Singapore, South Korea, Taiwan, Thailand, the Philippines and Vietnam), which is reported to have approximately 17,500 ultra-high net worth individuals (UHNWIs) and accounts for 18.5 percent of UHNWIs in the global market. It also projects the expected growth of Asian Family Offices market focusing on the North Asia hub from Hong Kong, and the South Asia hub from Singapore which is attracting more HNWIs from mainland China; and India as a distinct market segment.
“As the well-known Chinese saying goes Fu Bu Guo San Dai () which translates as wealth in the family does not pass to the third generation; the preservation and transfer of wealth through the generations is a long-standing concern and objective of families in Asia, especially in these times of unforeseen economic turmoil,” said Mr Patrick Wild, Head of Private Banking Overseas, VP Bank Group. “In this inaugural study of Family Offices in Asia, we are mindful of not imposing any model of Family Office which has been well established in Europe and U.S. on the Asian context, so that we may properly understand the cultural dynamics and market conditions that contribute to the evolution of the Family Office in Asia.”
Essentially, the Family Office is an institutionalized and well formalized model that is dedicated to the financial, corporate and personal needs of a wealthy family. The study finds that wealthy Asian families are not yet showing considerations for issues such as systemic wealth preservation, succession planning, legacy creation and more. In fact, the study has identified that the Asian Family Office market is characterized by “a plurality of players that are independently (e.g.
global banks) or collaboratively (e.g. asset managers, lawyers and independent advisors) providing Family Office services for wealthy Asian clients … these structures work as a dynamic network of different players” discussed as a “Hybrid Network Family Office Model”.
The study comprehensively illustrates this “Hybrid Network Family Office Model” – its implications and permutations in the Asian wealth market, as framed within the market conditions of high price sensitivity, strong desire for confidentiality and secrecy, and uniformed unwillingness to give anyone full wealth disclosure including their own family members.
“From this study, VP Bank is taking several initiatives to adapt our advisory-oriented private banking services to meet the market conditions influencing the evolution of Family Offices in Asia,” said Mr Patrick Wild. “For instance, we will be focusing on the needs of the second and third generations, and particularly on the emerging role of female members of the family in managing Family Offices in Asia.”
In its conclusion, the study highlights several determining factors for the growth in demand for Family Office services in Asia, which are:
• Impact of economic growth on UHNWI population
• Strategic decision with respect to the family business
• Wealth transition and family governance
• Education and financial sophistication
• Asset pooling effects through wealth consolidation
• Need for more transparency and independency
• Philanthropy
For further information, please contact:
Client inquiries
VP Bank (Singapore) Ltd.
9 Raffles Place; # 42-01 Republic Plaza; Singapore 048619
Reto Isenring, Managing Director
Tel +65 6305 0055
E-mail reto.isenring@vpbank.com
Media and analyst inquiries
Verwaltungs- und Privat-Bank Aktiengesellschaft
Aeulestrasse 6; LI-9490 Vaduz
Tanja Gartmann, Head of Corporate Communications
Tel +423 235 67 62, Fax +423 235 77 55
E-mail corporate.communications@vpbank.com
Agenda
Media and analyst conference
March 10, 2009
Annual general meeting
April 24, 2009
Facts & Figures VP Bank Group
Verwaltungs- und Privat-Bank Aktiengesellschaft (VP Bank) was founded in
1956 and is one of the largest banks in Liechtenstein. Today, it has subsidiaries in Zurich, Luxembourg, the British Virgin Islands and Singapore, as well as asset management companies in Munich, Dubai and Hong Kong, and representative offices in Moscow and Hong Kong. VP Bank set up its key Asian office in Singapore and started operations in June 2008. The Singapore office serves as its primary booking center for clients in Asia.
The Bank is comprised of the “Private Banking Clients” and “Intermediaries” business units, the “Banking Services” service unit, as well as the “Corporate Center”. As of June 30, 2008, VP Bank Group employed 718.1 individuals based on full-time equivalents. Total assets stood at CHF 11.5 billion, while client assets amounted to CHF 39.9 billion. The VP Bank Group has received an “A” rating from Standard& Poor’s.