Malaysia ready to become hub for Family Offices in ASEAN
KUALA LUMPUR: Malaysia has the potential to become a major hub for ASEAN’s private wealth advisory firms known as “Family Offices,” serving ultra-high net worth families, given its stable financial market and highly skilled workforce. Juwai IQI Global Chief Economist Shan Saeed said ASEAN is increasingly attracting the attention of family office firms due to the economic stability and growth in the region.
While many managers may tend to look towards advanced markets for family office capital, emerging trends in new markets deserve attention, he said. Shan shared insights on the impact created by family offices on the financial market, with assets under management (AUM) reaching US$6 trillion (US$1= RM4.75), emphasizing their significant influence on the investment and wealth management landscape.
According to London-based investment data company Preqin Ltd, the number of family offices has more than tripled in the past four years from 1,285 in 2019 to 4,592 by 2023. There has been a significant increase in the number of family offices across regions, with North America, Europe, and Asia experiencing growth rates of 20 percent, 17 percent, and 22 percent year-on-year in 2023, respectively, while globally, the figure jumped by 31 percent year-on-year.
“The growth cycle is shifting towards the East, driven by macroeconomic stability, robust infrastructure, a young demographic including strong domestic demand,” said Shan. Globally, investors tend towards jurisdictions with stable financial markets, mature regulatory frameworks, skilled financial workforce, and business-friendly economic policies.
He also emphasized that with increasing uncertainty in the market, family offices can provide the liquidity and stability needed by the system, thereby boosting market confidence. Shan predicts sovereign funds and family offices will be significant in driving the global financial markets in the next three to five years, in line with the rapid developments in the financial landscape. Countries like Malaysia, the United Arab Emirates (UAE) can benefit due to their stable financial markets besides having strong regulations in their economic systems.
“I am confident that ASEAN, the Gulf Cooperation Council (GCC), and the African region, collectively, can generate an additional wealth of US$2-US$3 trillion in the next two to three years.” “In Malaysia, Labuan has also become an important offshore financial center with low fee structures and procedures,” he told Bernama. Shan also highlighted the transformation in the global financial market since 16 to 17 years ago, with monetary and fiscal policies becoming more important in recent years.
“Disruptions in the market of this magnitude have not been seen for a decade. Governments are trying their best to maintain macroeconomic stability and retain confidence in the economy to stimulate growth. “Global investors are moving their capital, where growth stability is most important for most governments,
” he said. He also cited the establishment of family offices in renowned financial hubs such as Dubai, Hong Kong, London, Zurich, and Singapore. Family offices have been planning the most significant asset allocation transition for several years, with geopolitics becoming a determinant factor compared to inflation as the primary concern, while regional investment priorities continue to evolve.
– BERNAMA
