Eye on the prize: Singapore is now home to almost 60% of Asia’s family offices. — The Straits Times/ANN
A new cohort of young and successful Indian business elites are joining the Ambanis, the family behind Indian conglomerate Reliance Industries, in setting up their family offices in Singapore to preserve and grow their wealth.
The Ambanis, one of India’s wealthiest and most influential families, set up a family office here in 2022.
Many have humble beginnings, and now want to ensure their prosperity is passed down to the next generation along with the values that helped grow it.
To avoid family feuds, they are setting up family offices here for effective governance, communication and decision-making.
An estimated US$4 trillion (RM17.4 trillion) of wealth among the Indian diaspora will be transferred from one generation to the next in the coming decade, according to DBS.
“Singapore is a top destination for ultra-high-net-worth individual Indian families looking to establish a family office outside of India, thanks to its stable political and economic climate, favourable business environment and tax regime,” said Shee Tse Koon, head of consumer banking and wealth management at DBS Bank.
Arvind Tiku, founder and group chairman of investment firm AT Capital, added that Singapore’s regulatory environment, as well as its credibility and transparency, places the Republic ahead of other destinations.
Singapore is now home to almost 60% of Asia’s family offices. The number of wealthy families coming into the country is projected to have risen from 2,800 in 2022 to 3,200 in 2023, DBS said.
The bank on Nov 5 launched its sixth annual family office report, with this year’s edition examining the Indian family offices.
It estimated that there are more than 13,200 Indians with a net-worth greater than US$30mil (RM130mil), and the number is expected to increase rapidly.
In 2023, around 6,500 high net-worth Indians were estimated to have left India for destinations such as Dubai, Singapore, Europe and the United States.
As their wealth increases, many wealthy Indians seek a formal family office structure to avoid compliance and governance issues.
“Typically, what you’ll find in the joint family system is that the operating company will also manage the family’s investments,” said Amit Patni, founder and director of RAAY Foundation.
“People tend to use company cash flow to keep expanding without thinking about safeguarding enough money for the family,” he added.
Patni’s father and his brothers started Patni Computers in the 1970s, and were one of the pioneers in the information technology space in India.
Over the decades, the company grew to close to US$1.5bil. They sought a public listing in 2004, and in 2011 IT firm iGate bought Patni Computers for US$1.5bil.
After the sale of the business and the division of wealth, Patni set up a single family office – RAAY Global Investments – to ensure his inheritance became a vehicle for growth and entrepreneurship.
Rich Indian diaspora who are not yet in the billionaire category – typically families with more than US$5mil in investible assets – make their first foray into more formal office structures through a multi-family office (MFO), which have emerged as a fast-growing segment of the industry.
An MFO enables different wealthy families to pool their resources to access high-calibre, personalised financial advice while remaining cost-effective. — The Straits Times/ANN
