Asia-Pacific Family Offices Have Higher Appetite for Crypto, 38% Compared to 28% Global Average: Survey
This more willingness to invest in riskier assets has led to 29% of family offices in the region reporting a significant increase in wealth over the last 12 months, more than the global average of 21%.
Thanks to the greater willingness to invest in new asset classes, including cryptocurrencies and private equity, the wealth of family offices in Asia-Pacific has grown faster than global peers this year, according to the 2021 Global Family Office Report.
Family offices manage investment and succession planning for wealthy families or individuals.
The survey shows 29% of family offices in the region reported a significant increase in wealth over the last 12 months, more than the global average of 21%.
This increase in their wealth aligns with a greater percentage (38%) of family offices in Asia-Pacific, saying they would increase their exposure to cryptocurrencies, compared to the global average of 28%.
“A few years ago, we were still arguing if cryptocurrencies are a real asset class. This year, it is agreed that cryptocurrencies and blockchain technology, as well as NFTs, are here to stay,” said Kwan Chi-man, CEO of Raffles Family Office, which conducted the survey jointly with research firm Campden Wealth.
The survey involved 385 family offices globally between April and July. Seventy-six offices surveyed in Asia-Pacific managed families with a combined net worth of $122 billion.
“The strong growth of family offices in the region is driven by the fact that Asia is creating billionaires at a pace faster than anywhere in the world,” said Kwan, noting that 4 out of 10 new billionaires globally are coming from Greater China.
The Asia-Pacific region accounts for the highest number of ultra-high-net-worth individuals (HNWI), with 38% residing there.
According to the report, family offices in Asia-Pacific have been more willing to invest in riskier assets, with the potential for greater returns. About half of Asia-Pacific families offices surveyed said they would invest in such products, compared with just 32% in North America and 35% in Europe.
More than 90% of family offices in Asia-Pacific said they plan to increase or maintain their private equity investments next year.
According to Kwan, the appetite for riskier investments has grown as the second generation of wealthy families starts to take control of family assets, showing a greater tolerance for risk.
Meanwhile, this year, China reiterated its unfriendly stance on crypto as it cracked down on crypto mining. A crackdown on the technology sector by Beijing regulators has sent tech stocks plummeting as well, but Kwan said while the market slump is a “mini-crisis,” it would not hurt family offices in Asia.
They are cash-rich and may consider it a good time to buy low in the markets.