The Singapore-headquartered private bank examines trends in the Indian family office industry and the cohort of those who have left the country to live and work in other major financial hubs such as Hong Kong and Dubai.
The number of Indian family offices has surged in recent years to about 300 from just 45 in 2018, with many families of Indian origin having set up these organisations in Singapore, Hong Kong and Dubai, among other locations.
And Singapore-headquartered DBS Private Bank eyes this sector as an important growth opportunity.
The continued expansion of the Indian diaspora also presents major opportunities, according to a new white paper from DBS Private Bank. The 77-page study, which includes examples of real family offices and businesses, is entitled Global Indian Family Offices: Evolution of the Indian Diaspora. The report was researched and written in partnership with Bloomberg Media.
In 2023, it was estimated that around 6,500 HNW Indians had left India for new opportunities in centres such as Singapore, Dubai and Hong Kong.
Back to family offices, the study said an estimated 9 per cent of them globally are now based in Asia. With the number of ultra-HNW individuals in the region estimated to rise 40 per cent by 2028, the number of family offices in Asia should also rise.
This report mirrors work by others, such as UBS, who have delved into the details of the family offices sector, and examined the forces that have driven it. In the case of DBS, it said in 2023 that it banks serviced more than one-third of the 700 SFOs in Singapore, to give one example. In June 2023 the bank launched the DBS Multi Family Office Foundry VCC. DBS said this was the world’s first bank-backed multi-family office that uses the jurisdiction’s Variable Capital Company structure which was introduced in early 2020.
Banks know that while families sometimes create offices to take financial and non-financial tasks in-house – potentially cutting banks out of some of this business – they also use outsourced services, such as tech and investment, which banks can provide. Along with external asset managers, family offices are important intermediate clients for banks in Asia, as well as in countries such as Switzerland.
Into its sixth edition, this year’s DBS report delves into insights from 13 major entrepreneurs and philanthropists from the Indian diaspora. It mentions, for example, three Indian family offices: Premji Invest (established Azim Premji, the founder behind IT multinational Wipro); Catamaran Ventures (set up by Infosys founder N R Narayana Murthy); and Ambani Family Office, (founded by the Ambani family of Reliance Industries).
Putting the India-linked family offices market into a broader perspective, the report said that family offices globally oversee about $5.9 trillion in AuM.
“As the Indian diaspora grows its wealth, many are establishing family offices in jurisdictions all over the world. In fact, a significant number of them call Singapore home, in part thanks to the Singapore government’s strong support towards the establishment of family offices here,” Lee Woon Shiu, group head of wealth planning, family office and insurance solutions, DBS Private Bank, said. “Dealing with multiple jurisdictions creates possibilities but also complexities and raises a question for families of where the bulk of their assets should reside.”
“Staying abreast of tax and legal changes in the diverse jurisdictions where our UHNW Indian diaspora families reside is crucial with the increasing globalisation of Indian financial and human capital deployment. We have, for instance, recently been actively strategising with qualified local advisors to support many UHNW Indian families on navigating potential changes to tax regulations or even step-ups in tax enforcement in Europe and Asia.” Lee continued.
“We will continue to dial up our engagement with onshore Indian families who are keen to either set up a single family office in Singapore, or engage them on our multi-family office proposition as an alternative option. For families who are keen to enhance their philanthropic journeys to become ‘forces for good,’ we will facilitate by first engaging DBS Foundation-supported social enterprises and connecting them to other ecosystem partners, such as Temasek Trust Foundation Partners, to catalyse impact,” Lee added.
The rise in Indian family offices mirrors the rising wealth of the diaspora: More than 13,200 Indians have an estimated net worth greater than $30 million, and this number is expected to increase by more than half from 2023 to 2028, the highest growth rate globally.
Not so new
Structures, or approaches, similar to those used by family offices who have existed in India for decades, with the muneems of the 1970s – wealth managers who assisted the zamindars, or HNW individuals as they were called then – are seen as precursors of today’s fund managers.
The report showed that the top three destinations for Indian migrants in 2020 were the UAE (3.5 million); the US (2.7 million), and Saudi Arabia (2.5 million).
https://www.wealthbriefingasia.com/article.php/DBS-Private-Bank-Lifts-Lid-On-Indian-HNW-Diaspora%2C-Family-Office-Growth
