Due to the speedy growth of wealth and affluence in the region over the past decade, there has been an exponential increase in the number of super-rich individuals and families. Asia has one of the fastest-growing populations of high net-worth individuals (“HNWIs”), leading to a deep concentration of wealth.

Traditionally, families have held their investments through holding companies or special purpose vehicles (SPVs). Usually, this was due to the need to maintain confidentiality, the perceived simplicity of setting up in offshore jurisdictions, and to achieve ring-fencing through separate SPVs. 

There are numerous reasons for setting up a family office but one common reason is that families are looking to in-source the fund management function and to be more involved in the management of their financial assets. Quite often, the investment team also include the next generation family members who not only want to manage their own wealth but also gain experience and build a track record with a view of managing third party wealth in the future.

The setting up of a family office is paired with the setting up of a family fund. The set-up of a family fund establishes the structure for the family’s assets, maintain all their financial assets, facilitates succession planning and creates a more efficient management structure.