Trillions of investment dollars and top jobs that pay $1 million or more are up for grabs as the world’s ultra-rich drive demand

On a sweaty evening in June, while much of Hong Kong sat down for dinner, two dozen students were making their way to the third floor of an office block to be schooled in finance’s hottest trend.

The cohort was a white-collar jumble – some were private bankers with gym bags, others primly-dressed accountants. They’d come to study the ABCs of family offices – companies dedicated to managing enormous, secretive pools of generational wealth.

The night classes are part of a global race taking place from Singapore to Miami and Lausanne as governments fight to attract booming family office businesses, especially from Asia.

With residency, deluxe living and low taxes mere table-stakes, the availability of trained staff to help the ultra-rich run their lives and their money has become a key battleground.

Trillions of investment dollars and top jobs that sometimes pay $1 million or more are up for grabs.

“The talent gap is growing and becoming a problem,” says instructor Dixon Wong before his lesson at HKU Space, a continuing education school affiliated with Hong Kong University.

“Unlike many of the family offices in the US and Europe, Asian family offices are often managed by family members, but this approach has had some constraints and limitations.”

The rise of Asian family offices is tied to the region’s maturing fortunes. With much of the local money generated after the end of colonialism, many of the entrepreneurs who’ve become super rich are now seeking to manage and transfer wealth to their descendants – just as old-money families in Europe and the US have done for decades.

By 2025, financial wealth in Asia excluding Japan could outstrip the US, according to a projection by HSBC Holdings, which pegged the number at almost $140 trillion in 2021. Knight Frank predicts Asia will have more wealthy residents than Europe within three years.

The resulting surge in family office demand is hitting the region like a tsunami – 80 per cent of the companies surveyed for Campden Research’s Asia-Pacific Family Office Report last year were established after 2000.

The global family office industry was already managing nearly $6 trillion in 2019 – a figure that has only grown since then.

“Asia has tremendous growth potential,” says Rebecca Gooch, global head of insights at Deloitte Private in London. While the region only accounts for a fifth of all family offices, it’s the fastest-growing market in the world, she adds.

Financial hubs are ramping up efforts to get in on the action. Hong Kong has introduced a raft of tax and residency incentives aimed in part at luring clans wanting to invest in China, while Dubai has opened a dedicated centre for wealthy families.

Singapore was early to the game, offering tax breaks and other perks. The city state had about 1,100 family offices at the end of 2022, up from just 400 in 2020, according to Monetary Authority of Singapore estimates.

In March, the government said there was a backlog of 200 new applications. Hong Kong is targeting at least 200 top-tier offices by 2025.

All of these new companies need employees. Around 40 per cent of the family offices surveyed by KPMG International and Agreus Group are planning to hire this year, while almost 60 per cent of staff enjoyed pay rises last year.

In theory, they should be able to pluck from the growing pool of unemployed bankers as firms from Credit Suisse Group to Morgan Stanley shed thousands of jobs.

The reality is that family offices make unique demands of employees and are notoriously selective. One reason is secrecy – working at one of these companies gives employees an inside view of a clan’s entire existence, so trust is crucial.

A former family office executive told Bloomberg News they managed their client’s security details, investments, philanthropy and travel across multiple continents.

Being great at a finance job doesn’t always translate well to this line of work.

Three family office principals cite rather unconventional criteria when asked for their ideal hires. Discretion is a given, but one sought high levels of Mandarin and an appreciation for the work of American artist Jean-Michel Basquiat. Another says the ability to mediate among squabbling siblings is a priority.

“The soft skills are more important than the hard or technical skills because the latter can be imported or outsourced,” says Manish Tibrewal, who helped run the Tolaram Group’s family office before launching Farro Capital, a multifamily office in Singapore.

Asia faces a dearth of professionals with experience in this area, says Paul Westall, co-founder of Agreus, a family office recruitment company. That makes it vital to convert the deep pool of finance executives into discreet and flexible workers who are in high demand.

“If someone needs to pick the mail up or make a cup of coffee for the principal’s friend, then you may be required to do that,” Mr Westall says, noting one finance-trained head of a family office is working on the design of a client’s office. “Some people are just not going to be right for that.”

The hiring challenge is especially acute in places like Singapore, where companies must hire a minimum number of staff to reap tax exemptions and other benefits, even with an unemployment rate of just 1.9 per cent. Hong Kong’s labour market is also tight, with a jobless rate of 2.9 per cent.

To meet this demand, multiple governments are helping to fund and open schools that convert and train people – consider them equal parts networking hub, continuing education centre and finishing school.

In Singapore, much of the load has been borne by the Wealth Management Institute, an education and research centre founded in 2003 by state investors GIC and Temasek Holdings.

One of its signature programmes aims to turn graduates into “Certified Family Office Practitioners” once they complete courses costing 11,880 Singaporean dollars ($8,922) over five-and-a-half days. Permanent residents and Singaporean citizens are heavily subsidised. By 2025, it aims to have 5,000 enrolments into such programmes.

In Switzerland, the International Institute for Management Development traditionally ran its flagship “Leading your Family Office” programme in Lausanne, with Asian family office owners flying in for it – sometimes with their staff.

Since last year, the course has also been taught in Singapore. Over three-and-a-half days in November, they learn the ropes, with fees starting from 17,500 Singaporean dollars.

Singapore’s Asian rivals are starting to catch up. Hong Kong’s government plans to fund the Hong Kong Academy for Wealth Legacy to help train professionals in the same vein as Singapore’s wealth institute.

Dubai meanwhile launched the DIFC Family Wealth Centre in March, describing it as “the world’s first dedicated centre for family wealth”.

The Middle East hub is trying to lure family offices and businesses with a suite of benefits that include customised training and certification.

While family offices normally prefer to hire staff with experience in similar companies, the explosive growth means there aren’t enough people to go around, according to Jennifer Pendergast, professor of family enterprises at the Kellogg School of Management at Northwestern University in Chicago.

Nor is the boom limited to Asia – in June, she held a class in the school’s Miami campus for a cohort that included many Latin American family office executives.

“The space is growing so rapidly that you’re pulling people from places that haven’t done the job before – you can’t just keep cycling the same people,” she says.

The success of competing schools and courses may come down to how honest they are about the industry’s harsh truths.

Take the need for flexibility: in Mr Wong’s Hong Kong classroom, the ex-head of family office at Invest Hong Kong projects a survey on to a screen that shows professionals spend much of their time performing “administrative tasks”, before sharing that this can cover everything from organising trusts to helping clients get their kids into top schools.

One family office executive says their job ranges from screening investments and interacting with heads of state to booking plane tickets and arranging catering.

Another says they often take late-night calls when the patriarch gets trading ideas from his buddies. They were once told at 11pm to “buy gold”, with no further instructions. The boss was due back at the poker table.

The need for suitable talent has become so dire that some of Asia’s family offices are starting to hire interns.

When Elena Lee, a 19-year old Stanford University student, was looking for something to do over the summer, she applied for a Hong Kong family office job on LinkedIn.

For two months, Ms Lee worked in the back office learning how the industry ticked, occasionally joining executives on client calls.

The company was preparing to expand into Singapore, so she helped conduct research, while looking into ESG frameworks and trust structures.

“There is very, very limited exposure to family offices in the education system and I feel like the people teaching it don’t really understand it that well either,” she says.

“Initially, it just seemed like wealth management. But once you got into the firm and learnt about the operations more, you learn it’s a lot more holistic than that.”

As the clock strikes 10pm in Admiralty Centre, Mr Wong wraps up the class by taking questions. In coming weeks, the students will learn competing incentive schemes as well as the dark arts and structures used by billionaires to handle tricky wealth transfers.

When they descend the tower one last time, these students will have become some of the people most certified to join the growing ranks of professionals serving ultra-rich families.

“You get a nice summary of views – the dos and don’ts, but you can’t teach everything in a few weeks,” says Mr Tibrewal of such courses.

“Professionals need to develop comfort with the family and that only comes with time and experience.”

https://www-thenationalnews-com.cdn.ampproject.org/c/s/www.thenationalnews.com/business/money/2023/09/05/why-the-race-is-on-to-attract-lucrative-family-offices/?outputType=amp