March 5, 2025 • 25 mins
The world’s multi-billionaires, from Elon Musk to Sergey Brin, are increasingly using family offices to manage their wealth – and it’s big business. With more than 8,000 family offices globally managing an estimated $3.1 trillion in assets, it’s set to rival the hedge fund industry in size.
Major financial hubs -- from London to Dubai, Hong Kong to Singapore -- are actively competing to capture a slice of this booming market, offering enticing incentives to attract family offices. Dubai-based Ali-Abbas Merali, a partner at Azura Partners, discusses how and where the super-rich are investing their billions. He joins John Lee and Katia Dmitrieva on the Asia Centric podcast.
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Speaker 1 (00:00):
There's a cliche that the richer getting richer, but it's
really backed by numbers. The five hundred richest individuals in
the world, tracked by the Bloomberg Billionaires Index, saw their
wealth rise by over one point five trillion dollars last
year alone.
Speaker 2 (00:16):
It's interesting to consider what's behind that growth because the
uber wealthy don't just have anyone managing their money. Increasingly,
folks like Elon Musk Sergei Brinn are creating so called
family offices, where hands selected individuals manage their vast stores
of wealth. They tend to be quite secretive, but what
(00:36):
we do know is that there are about eight thousand
of these family offices around the world, with total assets
under management of about three point one trillion dollars. That's
expected to grow to more than five point four trillion
by the end of the decade, according to Deloitte. That
would make it larger than the entire hedge fund industry.
Speaker 1 (00:56):
And not surprisingly, global financial centers from London, Singapore and
Hong Kong all one a piece of this action. Now,
many of these family officers relocate to take advantage of
lower taxes and regional investments. You're listening to Asia Centric
from Bloomberg Intelligence. I'm John Lee calling in from Sydney.
Speaker 2 (01:17):
And I'm Katy Dmitrieva here in Hong Kong.
Speaker 1 (01:20):
Today we have the perfect guest to discuss the super rich,
how and where they invest their money. His name is
Ali Abbas Morali, partner of Azura Partners, a global wealth
manager catering to the ultra high net worth individuals and
family officers. He's dialing in from Dubai. Ali, Welcome to
the show.
Speaker 3 (01:38):
Thank you very much, sir John and Katya.
Speaker 2 (01:41):
So Ali, I want to get started by asking something
I'm personally curious about. We're talking about the super wealthy,
right and in case some listeners are maybe thinking about
starting a family office, just how much money do you
really need to have in order to even start thinking
about opening a family office.
Speaker 3 (02:00):
So that's a very interesting question to start off with.
There is no set answer. I would say, it really
just depends. There has to be a minimum figure where
you think that it makes sense to develop the infrastructure,
the personnel, the talent, the ability to interface with other managers,
the private banks. I would say that typically you would
(02:23):
need to have over one hundred million dollars to set
up your own family office.
Speaker 2 (02:27):
So you really have to be making quite a bit
of money. We're not talking about your average run of
the mill millionaire.
Speaker 3 (02:32):
No, because nowadays, with technological innovation, as you say, run
of the mill millionaire has wealth management platforms offered from
various private banks. You know, the retail banks are also
getting into what's known as premiere or other gold services
within their banking platforms. But really, when you start to
(02:56):
get to the ultra high net worth level is when
it needs to be a lot more and bespoke to
what ultra hinatworth families are requiring.
Speaker 1 (03:06):
And ali what type of services does a family office provide.
Now it's not just about managing money, right, No, absolutely not.
Speaker 3 (03:13):
It really varies from everything from you know, wealth structuring
really at the beginning, talking about how families need to
think about their wealth. You know, we work with families
on strategic asset allocation, investment policy statements, liquidity requirements for
the family. You know, it could be how much money
(03:36):
families require for their children's education from primary all the
way to university, healthcare. Philanthropic ambitions of families are now
becoming something that we're helping families on. You know, as
the wealthy get wealthier, they start to really think about
making impact from a charitable perspective also, and so we
(03:57):
advise families on, you know, how to preserve their capital,
grow their capital over the longer term, and also for
as I said, other philanthropic desires that they may have.
Speaker 2 (04:10):
And how close are these family offices to sort of
the creator the people that need it? Like I'm thinking
of someone like Elon Musk, you know, the person who
manages his money is sort of a long time friend
and associate of his Jared Burchell. So is it always
the case that these families or individuals would hand pick someone?
(04:31):
Is there sort of like a process of you know,
requests for proposals? How does that usually come together?
Speaker 3 (04:37):
Yeah, So the RFP process is something that we are
all too familiar with. It's a very rigorous process when
a family choose who it is that is going to
manage their wealth. Think about it like this, These individuals
have spent decades amassing a certain amount of wealth, and
(04:58):
so you know, it really comes with a lot of responsibility.
And therefore, you know, how they make the choice of
who it is that they want to manage their money
is as important as who is responsible for educating their
children for example. Right, So there is a very lengthy process.
We've been up against other institutions. You know. When clients
(05:19):
choose us, for example, it can be how many offices
do we have around the world, how many relationships do
we have with private banks and asset managers? Do we
have access to twenty four hour trading capabilities? Do we
have access to niche asset managers in particular industries? If,
for example, a client wants to be serviced by multiple offices,
(05:44):
so like for example, Azua, we have an office in
New York, Singapore, Dubai, Geneva. So as ultra high networth
families also become more international, they want to have various
touch points across their family office. You mentioned for example
Elon Musk and other uber rich billionaires, they have in
house advisors, so we deal with the in house team
(06:08):
as well as obviously the principle.
Speaker 1 (06:11):
Asia Centric is produced by Bloomberg Intelligence, where more than
five hundred experienced analysts and strategists work around the clock
to bring you timely, world class research. Our coverage spans
two hundred market indices, currencies, commodities and industries, as well
as over two thousand equities and credits. To learn more
about Bloomberg Intelligence, visit bi go on your Bloomberg terminal,
(06:35):
and if you like what you hear, don't forget to
subscribe and share. Ali, we talked about how the richer
getting richer, but it's that's what's driving the growth of
family officers. Because Kantier reeled off some numbers from Deloitte's
there seems to be a huge boom going on.
Speaker 3 (06:51):
You're right, there has been a huge increase in wealth
generation over the last ten to fifteen years. Ten years
in particular, when you see the innovation in tech and healthcare.
For example, the number of tech billionaires has increased. If
you look, for example at here in the UAE. The
UAE is a pioneer and a leader in digital financial
(07:14):
innovation cryptocurrencies. There's been a huge increase in wealth in
the crypto space. So as the world is getting richer
and as the wealthier getting wealthier, there is clearly a
demand for more tailored financial advice, and I think that's
where the family office really comes in.
Speaker 2 (07:35):
And pulling back to the industry, where does a lot
of this new wealth come from? You mentioned tech for example,
can we go into a bit more detail on where
you know, kind of in the past few years or
maybe going forward, where a lot of this wealth is
coming from. Is that the stock markets is a tech
and AI where is it coming from?
Speaker 3 (07:57):
So I think let's answer that question geographically. For so,
when you look at the emergence of countries like India, China,
other parts of South East Asia, the Middle East, obviously
parts of Africa, you're seeing an emergence of wealth from
these and I say this in inverted commerce developing nations
because they're no longer developing, they are quite developed, so
(08:20):
you have a huge increase there. And then within the
sectors you've got tech innovation from Asia, the Middle East,
and obviously the US you're seeing a whole raft of
as I said before, crypto millionaires. As I mentioned, the
UAE is really a pioneer and has welcomed the innovation
(08:41):
within tech and financial services. You know, that's just two sectors.
I mean, for example, real estate, ultra high networth and
even high net worth families will continuously invest in bricks
and mortar in real estate. And you look at the
Global Real Estate Index. Despite where interest rates are, real
estate values are increasing and so you're seeing growth of
(09:05):
wealth across the various sectors and geographies.
Speaker 1 (09:10):
And I want to discuss how global financial centers are
trying to compete or even buy to attract these family officers.
Which cities do you think are most successful.
Speaker 3 (09:25):
I have a bit of home bias, so I will
say Dubai has really over the last five years attracted
high net worth individuals and therefore family officers to set up.
I'll go into the factors. Singapore, for example, continues to
be a wealth management hub not only for the Asian region,
(09:45):
but also for the Middle East for the global Indian population.
Hong Kong again for mainland China and North Asia. Switzerland
predominantly and historically has been a wealth management hub. New
York continues to be a viable option, and Miami for
Latin America. And so as we see the emergence of
(10:09):
wealth across the globe, all these centers continue to develop
and innovate in order to attract family offices. So when
you look at the factors really that a family office
looks for, or a family in that matter looks for,
there's a few things. So number one, obviously the tax environment.
Speaker 2 (10:28):
Basically low taxes, basically yes.
Speaker 3 (10:30):
No taxes. Yes, that is the case in Dubai for example.
You know, high net worth individuals generally have an efficient
way of managing their tax situation. But in the case
of Dubai, if you don't need to because there's zero
tax then that's a big factor for them. The regulatory
framework is essential, you know, the business environment, the financial regulation,
(10:55):
the immigration and residency for example, has recently brought in
the ten year Golden visa program, right, so that automatically
means that talent are attracted to places where they know
that they have a sustainable future. You know, Singapore for example,
over the last twenty thirty years, has attracted a lot
(11:17):
of talent in the wealth management space. Global private banks
are setting up hubs for Asia Pacific in Singapore. Interestingly,
I think also the entrepreneurial ecosystem, so cities that have
a robust startup culture and access to private equity venture capital.
(11:38):
These are really important access to capital markets. You know,
a family office need to ensure that they have access
to robust stock markets, hedge funds. As I said, real
estate is always a very essential asset class for the
ultra high networth family. And then you think also global
(12:00):
activity right time zone. Dubai, for example, sits basically in
the middle where you've got access to Tokyo in the
morning all the way to New York in the evening.
Logistical connectivity, Dubai and Singapore, for example, are have access
to pretty much any city in the world with a
(12:20):
direct flight, you know. So all these factors need to
be there to ensure that there is an efficient system
for the family office.
Speaker 2 (12:29):
I wonder how you perceive Hong Kong now as potentially
a place for family offices. We have just recently heard
from Paul Chan with the budget announcement. There are a
lot of promises for the tech sector, for the development
of AI, for attracting talent, and also some cuts for
high networth individuals, for example, easier citizenship if they invest
(12:52):
a certain level of money in the city's real estate.
Speaker 3 (12:56):
So Hong Kong continues to be a very strategic, important
financial center predominantly for mainland China, for North Asia. That's
not going to disappear. I think, you know, every city
will need to up their game in terms of innovation
to attract fun flow, capital flow, flow of people. Right again,
(13:19):
I keep bringing it back to Dubai, you know, Dubai
attracted close to seven thousand millionaires in twenty twenty four.
Hong Kong clearly are adapting their policies to make sure
that they retain capital and talent. You know, the capital
market system in Hong Kong, the political stability are all
(13:39):
factors that will continue to keep Hong Kong in I
would say the top five financial.
Speaker 1 (13:45):
Center, Nolie. What about the Indian wealth? Now, India has
gone through significant wealth creation over the last decade. A
lot of Indian billionaires and millionaires are investing in offshore centers.
Where are they investing. Are they parking their money in Dubai, London, Singapore?
Just give us some color.
Speaker 3 (14:07):
I think they're parking their money in all three to
be honest, and I'll go from historical to present. So
London historically has had very strong cultural and business ties
with the Indian community. You know, wealthy Indian families were
attracted to London in the past for three reasons, good education,
(14:30):
access to good healthcare, and real estate. If I give
a personal example, my family migrated to London in the
sixties for exactly those three reasons. And then I was
born and raised in Okay. So they want to send
their kids to eaton and they want to live in
Ninth Bridge. Yes, exactly basically. So if you look, for example,
(14:51):
at the fact that now the tax system, the whole
non dom tax regime has changed or is in the
process of changing, London still provided a very strong tax
and regulatory system for the global Indian family. And then
if you look, for example at Singapore, the cultural affinity
between Singapore and India is very strong, so some of
(15:14):
the Indian families then started looking East for exactly the
same reasons, whether it was real estate, education and healthcare.
You know, Singapore provided a very efficient governance structure, which
is what most families will look for. And you know,
in particular, when international Indian family started saying okay, you
know where can we invest our money, Singapore and other
(15:38):
parts of the Asian region became very significant. And then
as Singapore built up its reputation as a wealth management hub,
they started parking a lot of their assets there. And
then if you look now at Dubai, the Indian diaspora
in Dubai is the largest foreign community. You know, they
(15:59):
have very strong culture and business ties. In fact, before
the Dirham, the Indian rupee was the currency in use
in the UAE. You know, the gold exchange between Indian
and Dubai. The DMCC, the Dubai Commodity Center are all
infrastructure that Dubai has presented to the Indian family. Again,
(16:23):
you look at over the last twenty years, Dubai's real
estate sector has provided a lot of opportunity for the
Indian family. Free zones. You know, a lot of Indian
families when they first looked at the UAE, when they
were setting up businesses, they had to have local EMORTI sponsors.
As Dubai started incorporating free zones where there's one hundred
(16:45):
percent foreign ownership. As I mentioned before, the tenure visa,
so a lot of international families, specifically Indian families are
now able to view Dubai as a long term sustainable option.
And finally, you know, the DFC, which is a d
Bay International Financial Center regulated by the DFSA, provides family
(17:06):
offices access to a robust English common law based legal
framework that is familiar and attractive to international specifically Indian investors.
You know, there's always been English common law similarities between
India and the UK, and now Dubai through the DFSA.
Speaker 1 (17:26):
Alie, I'm really interested in one question. How much wealth
creation has there been from cryptocurrency like bitcoin bros.
Speaker 3 (17:35):
Is it real? Tell us Bitcoin Bros. I like that, Yes,
simple answer. You think. In the end of twenty twenty
four hosted the AI and Crypto Currency Summit. So a
lot of these bitcoin Broses you call them, have made
significant money, not just on the main currencies like bitcoin,
(17:58):
but also some of these coins or meme coins, which
I don't fully understand the meme coins, but on the
main digital currencies. Yes, there's been a huge amount of
wealth generation on that side. And you know they're young,
so how they manage and what they look for from
a financial advisor is very different, you know to what
a slightly older industrialist family would look for. And so
(18:23):
you know, we have a few bitcoin bros As you
call them at Azua who we manage well.
Speaker 1 (18:28):
Still, they're not investing in the old sixty to forty as.
Speaker 3 (18:30):
Allocation is so surprisingly because of the fact that they
have generated their wealth so quickly. One of the first
things they say is, Okay, let's preserve some of the
capital that we have made. You know, let's do that
boring asset allocation of fixed income and equities, keep some
in money market, and then let's have a more tactical
(18:54):
approach by investing in some private equity or some VC companies,
which is something that we have really focused on at Azora.
One of the divisions that has really grown over the
last five years since our inception has been our Strategic
Opportunities business, which is the access to pre IPO private
(19:14):
companies either out of the US or India, for example.
Speaker 2 (19:19):
Since we're talking about how bitcoin investors invest, I'm curious
that we can talk a bit about where this money
is being deployed. Bloomberg News had a great story earlier
this month that was led by Ben Stupples that just
looked at how family offices are increasingly taking bigger risks globally.
(19:39):
So Bluepool Capital, for example, which helps to oversee Josie's fortune,
acquired a twelve percent stake in Golden Goose Group. Now,
if you're not familiar with this company, it's an Italian
maker of fifteen hundred dollars jewel encrusted running shoes that
was during a downturn in Europe's luxury sect. So you're
(20:01):
seeing these family offices taking on more and more risky bets.
So I'm wondering, like going into where the money is
being deployed in the family offices, where is it going?
Is it you just highlighted a one specific strategy that
might work for some people you advise, but kind of
more broadly, where the fund's going.
Speaker 3 (20:21):
It's a great question. And not to bore you with
asset allocation one O one, but asset classes are split
into really four main buckets. You've got cash and money market,
you've got fixed income, equities, and alternatives. What you're referring
to is in the alternative space, and you're right. What
we're seeing also is that clients and families are looking
(20:45):
at more investment opportunities within the alternatives, whether it's private equity,
private credit, real estate, trade finance art you know. As
the returns in the public markets, obviously they've been strong,
but anyone in everyone can access the public markets. So
(21:06):
where we have an edge and other family offices are
the access to the more niche private equity or VC managers.
For example, we gave our clients access to one of
the largest private jet companies globally, you know, and not
everyone can have access to the private aviation sector. So
(21:27):
for example, there is a manager that we're talking to
that is looking at specifically commercial real estate stroke hospitality
in central London. As the move of work from home
back to offices is happening, there is a demand for that.
So the alternative space where liquidity may not be as high,
(21:50):
but you know you're getting compensated for that illiquidity risk
with higher returns. So families are certainly looking at where
they can find these double digit returns and you can
only get that in the alternative space.
Speaker 1 (22:03):
And Ali, you've been working for a couple of decades
in the finance industry, particularly in the private banking space,
and I know you work for a few global banks,
including some Swiss banks in the past. How has the
industry changed over the last two decades, like in terms
of where they invest their money, the structure or just
(22:24):
is it become much more global? Just give us an
overlay of the land.
Speaker 3 (22:28):
You're right. I started my career twenty two years ago
at UBS in London. London at that time was one
of the most prominent private banking hubs and I was
covering the Middle East clientele from UBS in London, and
then in two thousand and five I moved to Dubai
where I, as you said, worked for a few international
(22:51):
private banks covering the Middle East region. How clients have
invested over the last twenty years, and we touched on
it in the previous question with Katya. As the financial
markets have evolved, the client's demands have evolved as well.
Clients have become a lot more sophisticated on how and
(23:12):
where they invest their money. Technology has played a massive
role in determining how and where clients invest their money.
You know, think about twenty years ago, we didn't even
have smartphones to help clients. And at the click of
a button, you want to buy a bitcoin ETF, you
can do that on your smartphone within a second. I
(23:33):
mean twenty years ago, we didn't even know what bitcoin was. Right. Also,
the internationalization of wealthy families has increased. Before, when a
client was residing or had a set up in one
particular country, that was it. Now you have the clients
(23:53):
in one city one week and another city another week.
Their kids are in four different locations and they all
travel insensibly. So therefore the demands on the financial advisor
obviously has changed. And then you look at the period
of time twenty and twenty when we had COVID and
we had to revert or go to a remote working
(24:14):
system where technology had to further innovate in order to
make sure that we could still do our jobs as
efficiently as possible, unable to meet clients, but still make
sure that we're able to provide the highest level of service.
I think the banks also, their platforms have evolved. Again
we come to technology. A bank's technological platform has advanced
(24:38):
to such an extent that you know, you now have
robo advisors for the mass affluent or you know, the
high net worth. Certainly the whole industry has changed and
where clients look to invest their money. You know, markets
such as the Middle East, which were frontier markets even
(24:59):
fifty years ago, ten years ago, are now core emerging
markets and make up a significant part of client's portfolios.
Speaker 2 (25:08):
So a lot has changed. One thing that has not
changed is that John and I will not be opening
a family office at any time in the near future.
Dear listener, really interesting conversation. Thanks so much for joining
us today.
Speaker 3 (25:20):
Ali, thank you, it's been my pleasure You've been.
Speaker 2 (25:23):
Listening to Asia Centric from Bloomberg Intelligence. I'm Kat Dimitrieva
here in Hong Kong. You can find me on LinkedIn
or on the terminal.
Speaker 1 (25:30):
I'm John Lee. You can also find me on LinkedIn.
Speaker 2 (25:33):
You can find Asia Centric on Apple Podcasts, Spotify, and
everywhere else you listen.
Speaker 1 (25:37):
This podcast was produced and edited by Clara Chen. Thanks
for listening, See you next time.
There's a cliche that the richer getting richer, but it's
really backed by numbers. The five hundred richest individuals in
the world, tracked by the Bloomberg Billionaires Index, saw their
wealth rise by over one point five trillion dollars last
year alone.
Speaker 2 (00:16):
It's interesting to consider what's behind that growth because the
uber wealthy don't just have anyone managing their money. Increasingly,
folks like Elon Musk Sergei Brinn are creating so called
family offices, where hands selected individuals manage their vast stores
of wealth. They tend to be quite secretive, but what
(00:36):
we do know is that there are about eight thousand
of these family offices around the world, with total assets
under management of about three point one trillion dollars. That's
expected to grow to more than five point four trillion
by the end of the decade, according to Deloitte. That
would make it larger than the entire hedge fund industry.
Speaker 1 (00:56):
And not surprisingly, global financial centers from London, Singapore and
Hong Kong all one a piece of this action. Now,
many of these family officers relocate to take advantage of
lower taxes and regional investments. You're listening to Asia Centric
from Bloomberg Intelligence. I'm John Lee calling in from Sydney.
Speaker 2 (01:17):
And I'm Katy Dmitrieva here in Hong Kong.
Speaker 1 (01:20):
Today we have the perfect guest to discuss the super rich,
how and where they invest their money. His name is
Ali Abbas Morali, partner of Azura Partners, a global wealth
manager catering to the ultra high net worth individuals and
family officers. He's dialing in from Dubai. Ali, Welcome to
the show.
Speaker 3 (01:38):
Thank you very much, sir John and Katya.
Speaker 2 (01:41):
So Ali, I want to get started by asking something
I'm personally curious about. We're talking about the super wealthy,
right and in case some listeners are maybe thinking about
starting a family office, just how much money do you
really need to have in order to even start thinking
about opening a family office.
Speaker 3 (02:00):
So that's a very interesting question to start off with.
There is no set answer. I would say, it really
just depends. There has to be a minimum figure where
you think that it makes sense to develop the infrastructure,
the personnel, the talent, the ability to interface with other managers,
the private banks. I would say that typically you would
(02:23):
need to have over one hundred million dollars to set
up your own family office.
Speaker 2 (02:27):
So you really have to be making quite a bit
of money. We're not talking about your average run of
the mill millionaire.
Speaker 3 (02:32):
No, because nowadays, with technological innovation, as you say, run
of the mill millionaire has wealth management platforms offered from
various private banks. You know, the retail banks are also
getting into what's known as premiere or other gold services
within their banking platforms. But really, when you start to
(02:56):
get to the ultra high net worth level is when
it needs to be a lot more and bespoke to
what ultra hinatworth families are requiring.
Speaker 1 (03:06):
And ali what type of services does a family office provide.
Now it's not just about managing money, right, No, absolutely not.
Speaker 3 (03:13):
It really varies from everything from you know, wealth structuring
really at the beginning, talking about how families need to
think about their wealth. You know, we work with families
on strategic asset allocation, investment policy statements, liquidity requirements for
the family. You know, it could be how much money
(03:36):
families require for their children's education from primary all the
way to university, healthcare. Philanthropic ambitions of families are now
becoming something that we're helping families on. You know, as
the wealthy get wealthier, they start to really think about
making impact from a charitable perspective also, and so we
(03:57):
advise families on, you know, how to preserve their capital,
grow their capital over the longer term, and also for
as I said, other philanthropic desires that they may have.
Speaker 2 (04:10):
And how close are these family offices to sort of
the creator the people that need it? Like I'm thinking
of someone like Elon Musk, you know, the person who
manages his money is sort of a long time friend
and associate of his Jared Burchell. So is it always
the case that these families or individuals would hand pick someone?
(04:31):
Is there sort of like a process of you know,
requests for proposals? How does that usually come together?
Speaker 3 (04:37):
Yeah, So the RFP process is something that we are
all too familiar with. It's a very rigorous process when
a family choose who it is that is going to
manage their wealth. Think about it like this, These individuals
have spent decades amassing a certain amount of wealth, and
(04:58):
so you know, it really comes with a lot of responsibility.
And therefore, you know, how they make the choice of
who it is that they want to manage their money
is as important as who is responsible for educating their
children for example. Right, So there is a very lengthy process.
We've been up against other institutions. You know. When clients
(05:19):
choose us, for example, it can be how many offices
do we have around the world, how many relationships do
we have with private banks and asset managers? Do we
have access to twenty four hour trading capabilities? Do we
have access to niche asset managers in particular industries? If,
for example, a client wants to be serviced by multiple offices,
(05:44):
so like for example, Azua, we have an office in
New York, Singapore, Dubai, Geneva. So as ultra high networth
families also become more international, they want to have various
touch points across their family office. You mentioned for example
Elon Musk and other uber rich billionaires, they have in
house advisors, so we deal with the in house team
(06:08):
as well as obviously the principle.
Speaker 1 (06:11):
Asia Centric is produced by Bloomberg Intelligence, where more than
five hundred experienced analysts and strategists work around the clock
to bring you timely, world class research. Our coverage spans
two hundred market indices, currencies, commodities and industries, as well
as over two thousand equities and credits. To learn more
about Bloomberg Intelligence, visit bi go on your Bloomberg terminal,
(06:35):
and if you like what you hear, don't forget to
subscribe and share. Ali, we talked about how the richer
getting richer, but it's that's what's driving the growth of
family officers. Because Kantier reeled off some numbers from Deloitte's
there seems to be a huge boom going on.
Speaker 3 (06:51):
You're right, there has been a huge increase in wealth
generation over the last ten to fifteen years. Ten years
in particular, when you see the innovation in tech and healthcare.
For example, the number of tech billionaires has increased. If
you look, for example at here in the UAE. The
UAE is a pioneer and a leader in digital financial
(07:14):
innovation cryptocurrencies. There's been a huge increase in wealth in
the crypto space. So as the world is getting richer
and as the wealthier getting wealthier, there is clearly a
demand for more tailored financial advice, and I think that's
where the family office really comes in.
Speaker 2 (07:35):
And pulling back to the industry, where does a lot
of this new wealth come from? You mentioned tech for example,
can we go into a bit more detail on where
you know, kind of in the past few years or
maybe going forward, where a lot of this wealth is
coming from. Is that the stock markets is a tech
and AI where is it coming from?
Speaker 3 (07:57):
So I think let's answer that question geographically. For so,
when you look at the emergence of countries like India, China,
other parts of South East Asia, the Middle East, obviously
parts of Africa, you're seeing an emergence of wealth from
these and I say this in inverted commerce developing nations
because they're no longer developing, they are quite developed, so
(08:20):
you have a huge increase there. And then within the
sectors you've got tech innovation from Asia, the Middle East,
and obviously the US you're seeing a whole raft of
as I said before, crypto millionaires. As I mentioned, the
UAE is really a pioneer and has welcomed the innovation
(08:41):
within tech and financial services. You know, that's just two sectors.
I mean, for example, real estate, ultra high networth and
even high net worth families will continuously invest in bricks
and mortar in real estate. And you look at the
Global Real Estate Index. Despite where interest rates are, real
estate values are increasing and so you're seeing growth of
(09:05):
wealth across the various sectors and geographies.
Speaker 1 (09:10):
And I want to discuss how global financial centers are
trying to compete or even buy to attract these family officers.
Which cities do you think are most successful.
Speaker 3 (09:25):
I have a bit of home bias, so I will
say Dubai has really over the last five years attracted
high net worth individuals and therefore family officers to set up.
I'll go into the factors. Singapore, for example, continues to
be a wealth management hub not only for the Asian region,
(09:45):
but also for the Middle East for the global Indian population.
Hong Kong again for mainland China and North Asia. Switzerland
predominantly and historically has been a wealth management hub. New
York continues to be a viable option, and Miami for
Latin America. And so as we see the emergence of
(10:09):
wealth across the globe, all these centers continue to develop
and innovate in order to attract family offices. So when
you look at the factors really that a family office
looks for, or a family in that matter looks for,
there's a few things. So number one, obviously the tax environment.
Speaker 2 (10:28):
Basically low taxes, basically yes.
Speaker 3 (10:30):
No taxes. Yes, that is the case in Dubai for example.
You know, high net worth individuals generally have an efficient
way of managing their tax situation. But in the case
of Dubai, if you don't need to because there's zero
tax then that's a big factor for them. The regulatory
framework is essential, you know, the business environment, the financial regulation,
(10:55):
the immigration and residency for example, has recently brought in
the ten year Golden visa program, right, so that automatically
means that talent are attracted to places where they know
that they have a sustainable future. You know, Singapore for example,
over the last twenty thirty years, has attracted a lot
(11:17):
of talent in the wealth management space. Global private banks
are setting up hubs for Asia Pacific in Singapore. Interestingly,
I think also the entrepreneurial ecosystem, so cities that have
a robust startup culture and access to private equity venture capital.
(11:38):
These are really important access to capital markets. You know,
a family office need to ensure that they have access
to robust stock markets, hedge funds. As I said, real
estate is always a very essential asset class for the
ultra high networth family. And then you think also global
(12:00):
activity right time zone. Dubai, for example, sits basically in
the middle where you've got access to Tokyo in the
morning all the way to New York in the evening.
Logistical connectivity, Dubai and Singapore, for example, are have access
to pretty much any city in the world with a
(12:20):
direct flight, you know. So all these factors need to
be there to ensure that there is an efficient system
for the family office.
Speaker 2 (12:29):
I wonder how you perceive Hong Kong now as potentially
a place for family offices. We have just recently heard
from Paul Chan with the budget announcement. There are a
lot of promises for the tech sector, for the development
of AI, for attracting talent, and also some cuts for
high networth individuals, for example, easier citizenship if they invest
(12:52):
a certain level of money in the city's real estate.
Speaker 3 (12:56):
So Hong Kong continues to be a very strategic, important
financial center predominantly for mainland China, for North Asia. That's
not going to disappear. I think, you know, every city
will need to up their game in terms of innovation
to attract fun flow, capital flow, flow of people. Right again,
(13:19):
I keep bringing it back to Dubai, you know, Dubai
attracted close to seven thousand millionaires in twenty twenty four.
Hong Kong clearly are adapting their policies to make sure
that they retain capital and talent. You know, the capital
market system in Hong Kong, the political stability are all
(13:39):
factors that will continue to keep Hong Kong in I
would say the top five financial.
Speaker 1 (13:45):
Center, Nolie. What about the Indian wealth? Now, India has
gone through significant wealth creation over the last decade. A
lot of Indian billionaires and millionaires are investing in offshore centers.
Where are they investing. Are they parking their money in Dubai, London, Singapore?
Just give us some color.
Speaker 3 (14:07):
I think they're parking their money in all three to
be honest, and I'll go from historical to present. So
London historically has had very strong cultural and business ties
with the Indian community. You know, wealthy Indian families were
attracted to London in the past for three reasons, good education,
(14:30):
access to good healthcare, and real estate. If I give
a personal example, my family migrated to London in the
sixties for exactly those three reasons. And then I was
born and raised in Okay. So they want to send
their kids to eaton and they want to live in
Ninth Bridge. Yes, exactly basically. So if you look, for example,
(14:51):
at the fact that now the tax system, the whole
non dom tax regime has changed or is in the
process of changing, London still provided a very strong tax
and regulatory system for the global Indian family. And then
if you look, for example at Singapore, the cultural affinity
between Singapore and India is very strong, so some of
(15:14):
the Indian families then started looking East for exactly the
same reasons, whether it was real estate, education and healthcare.
You know, Singapore provided a very efficient governance structure, which
is what most families will look for. And you know,
in particular, when international Indian family started saying okay, you
know where can we invest our money, Singapore and other
(15:38):
parts of the Asian region became very significant. And then
as Singapore built up its reputation as a wealth management hub,
they started parking a lot of their assets there. And
then if you look now at Dubai, the Indian diaspora
in Dubai is the largest foreign community. You know, they
(15:59):
have very strong culture and business ties. In fact, before
the Dirham, the Indian rupee was the currency in use
in the UAE. You know, the gold exchange between Indian
and Dubai. The DMCC, the Dubai Commodity Center are all
infrastructure that Dubai has presented to the Indian family. Again,
(16:23):
you look at over the last twenty years, Dubai's real
estate sector has provided a lot of opportunity for the
Indian family. Free zones. You know, a lot of Indian
families when they first looked at the UAE, when they
were setting up businesses, they had to have local EMORTI sponsors.
As Dubai started incorporating free zones where there's one hundred
(16:45):
percent foreign ownership. As I mentioned before, the tenure visa,
so a lot of international families, specifically Indian families are
now able to view Dubai as a long term sustainable option.
And finally, you know, the DFC, which is a d
Bay International Financial Center regulated by the DFSA, provides family
(17:06):
offices access to a robust English common law based legal
framework that is familiar and attractive to international specifically Indian investors.
You know, there's always been English common law similarities between
India and the UK, and now Dubai through the DFSA.
Speaker 1 (17:26):
Alie, I'm really interested in one question. How much wealth
creation has there been from cryptocurrency like bitcoin bros.
Speaker 3 (17:35):
Is it real? Tell us Bitcoin Bros. I like that, Yes,
simple answer. You think. In the end of twenty twenty
four hosted the AI and Crypto Currency Summit. So a
lot of these bitcoin Broses you call them, have made
significant money, not just on the main currencies like bitcoin,
(17:58):
but also some of these coins or meme coins, which
I don't fully understand the meme coins, but on the
main digital currencies. Yes, there's been a huge amount of
wealth generation on that side. And you know they're young,
so how they manage and what they look for from
a financial advisor is very different, you know to what
a slightly older industrialist family would look for. And so
(18:23):
you know, we have a few bitcoin bros As you
call them at Azua who we manage well.
Speaker 1 (18:28):
Still, they're not investing in the old sixty to forty as.
Speaker 3 (18:30):
Allocation is so surprisingly because of the fact that they
have generated their wealth so quickly. One of the first
things they say is, Okay, let's preserve some of the
capital that we have made. You know, let's do that
boring asset allocation of fixed income and equities, keep some
in money market, and then let's have a more tactical
(18:54):
approach by investing in some private equity or some VC companies,
which is something that we have really focused on at Azora.
One of the divisions that has really grown over the
last five years since our inception has been our Strategic
Opportunities business, which is the access to pre IPO private
(19:14):
companies either out of the US or India, for example.
Speaker 2 (19:19):
Since we're talking about how bitcoin investors invest, I'm curious
that we can talk a bit about where this money
is being deployed. Bloomberg News had a great story earlier
this month that was led by Ben Stupples that just
looked at how family offices are increasingly taking bigger risks globally.
(19:39):
So Bluepool Capital, for example, which helps to oversee Josie's fortune,
acquired a twelve percent stake in Golden Goose Group. Now,
if you're not familiar with this company, it's an Italian
maker of fifteen hundred dollars jewel encrusted running shoes that
was during a downturn in Europe's luxury sect. So you're
(20:01):
seeing these family offices taking on more and more risky bets.
So I'm wondering, like going into where the money is
being deployed in the family offices, where is it going?
Is it you just highlighted a one specific strategy that
might work for some people you advise, but kind of
more broadly, where the fund's going.
Speaker 3 (20:21):
It's a great question. And not to bore you with
asset allocation one O one, but asset classes are split
into really four main buckets. You've got cash and money market,
you've got fixed income, equities, and alternatives. What you're referring
to is in the alternative space, and you're right. What
we're seeing also is that clients and families are looking
(20:45):
at more investment opportunities within the alternatives, whether it's private equity,
private credit, real estate, trade finance art you know. As
the returns in the public markets, obviously they've been strong,
but anyone in everyone can access the public markets. So
(21:06):
where we have an edge and other family offices are
the access to the more niche private equity or VC managers.
For example, we gave our clients access to one of
the largest private jet companies globally, you know, and not
everyone can have access to the private aviation sector. So
(21:27):
for example, there is a manager that we're talking to
that is looking at specifically commercial real estate stroke hospitality
in central London. As the move of work from home
back to offices is happening, there is a demand for that.
So the alternative space where liquidity may not be as high,
(21:50):
but you know you're getting compensated for that illiquidity risk
with higher returns. So families are certainly looking at where
they can find these double digit returns and you can
only get that in the alternative space.
Speaker 1 (22:03):
And Ali, you've been working for a couple of decades
in the finance industry, particularly in the private banking space,
and I know you work for a few global banks,
including some Swiss banks in the past. How has the
industry changed over the last two decades, like in terms
of where they invest their money, the structure or just
(22:24):
is it become much more global? Just give us an
overlay of the land.
Speaker 3 (22:28):
You're right. I started my career twenty two years ago
at UBS in London. London at that time was one
of the most prominent private banking hubs and I was
covering the Middle East clientele from UBS in London, and
then in two thousand and five I moved to Dubai
where I, as you said, worked for a few international
(22:51):
private banks covering the Middle East region. How clients have
invested over the last twenty years, and we touched on
it in the previous question with Katya. As the financial
markets have evolved, the client's demands have evolved as well.
Clients have become a lot more sophisticated on how and
(23:12):
where they invest their money. Technology has played a massive
role in determining how and where clients invest their money.
You know, think about twenty years ago, we didn't even
have smartphones to help clients. And at the click of
a button, you want to buy a bitcoin ETF, you
can do that on your smartphone within a second. I
(23:33):
mean twenty years ago, we didn't even know what bitcoin was. Right. Also,
the internationalization of wealthy families has increased. Before, when a
client was residing or had a set up in one
particular country, that was it. Now you have the clients
(23:53):
in one city one week and another city another week.
Their kids are in four different locations and they all
travel insensibly. So therefore the demands on the financial advisor
obviously has changed. And then you look at the period
of time twenty and twenty when we had COVID and
we had to revert or go to a remote working
(24:14):
system where technology had to further innovate in order to
make sure that we could still do our jobs as
efficiently as possible, unable to meet clients, but still make
sure that we're able to provide the highest level of service.
I think the banks also, their platforms have evolved. Again
we come to technology. A bank's technological platform has advanced
(24:38):
to such an extent that you know, you now have
robo advisors for the mass affluent or you know, the
high net worth. Certainly the whole industry has changed and
where clients look to invest their money. You know, markets
such as the Middle East, which were frontier markets even
(24:59):
fifty years ago, ten years ago, are now core emerging
markets and make up a significant part of client's portfolios.
Speaker 2 (25:08):
So a lot has changed. One thing that has not
changed is that John and I will not be opening
a family office at any time in the near future.
Dear listener, really interesting conversation. Thanks so much for joining
us today.
Speaker 3 (25:20):
Ali, thank you, it's been my pleasure You've been.
Speaker 2 (25:23):
Listening to Asia Centric from Bloomberg Intelligence. I'm Kat Dimitrieva
here in Hong Kong. You can find me on LinkedIn
or on the terminal.
Speaker 1 (25:30):
I'm John Lee. You can also find me on LinkedIn.
Speaker 2 (25:33):
You can find Asia Centric on Apple Podcasts, Spotify, and
everywhere else you listen.
Speaker 1 (25:37):
This podcast was produced and edited by Clara Chen. Thanks
for listening, See you next time.
Hosts And Creators
John Lee
Tom Corbett
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