Tue, Apr 24, 2012 - Page 9 News List

Europe’s old wealth seeks new home in Asia

Wealthy families are flocking to Singapore to establish family offices close to where their investment action is centered

By John O’Callaghan and Charmian Kok  /  Reuters, SINGAPORE

Illustration: Yusha

In the 1470s, the prominent Spinola family of Genoa had an apprentice business agent in Barcelona named Christopher Columbus helping to handle their shipments, preparing the young sailor for his later voyages of discovery to the New World.

These days, that Italian clan and other ultra-affluent families are moving assets to Singapore by setting up family offices in a city-state often touted as the Switzerland of Asia.

Wealthy people from Europe and the Americas have long looked to the East for ways to build and preserve their fortunes, but only recently have they started opening family offices — private companies that manage the trusts and investments of rich households — in the region in earnest.

“Because Asia has been a place where we’ve been investing very heavily — more than 50 percent of our assets are in Asia for the last 15 years — we feel a need to come closer,” said Federico Spinola, son of the family patriarch, from New Caledonia, a Pacific archipelago known as the “Land of Eternal Spring.”

Campden Wealth, which provides research and data on family offices, says up to 10 European family offices have moved to Singapore since the financial crisis in 2008, bringing between US$5 billion and US$10 billion worth of assets with them.

Singapore, a global banking and investment center in the heart of Southeast Asia, is an attractive base for its efficient registration process, relatively benign regulations, smooth movement of money, financial infrastructure and low tax rates.

Clean and safe, it also offers high-end shopping, fine dining, casinos, luxury hotels, golf courses and marinas filled with super-yachts to help the wealthy spend and unwind.

Asia’s prospects are alluring as economies in Europe and the US look weak. After the crisis, regulatory pressures in the West and a crackdown on offshore centers have hastened the pace of family offices moving to Singapore and Hong Kong.

“The families want to be where the action is,” said Munish Dhall, a UBS executive director and head of ultra-high net worth offering and client development. “They want a piece of the economic pie.”

Big financial institutions, feeling the pinch of a tougher investment banking climate and higher capital requirements, are taking note — and looking to get their own piece of the action.

UBS, a Swiss banking giant, has set up a family office team that is looking to cater to two dozen clients in Asia who have assets of US$200 million or more. Other global players like Credit Suisse, HSBC and Canada’s RBC Wealth are also courting family offices, along with Singapore-based DBS Group.

The Spinolas, whose ancestors include crusaders during the Middle Ages, cardinals of the Holy Roman Empire and influential figures in the politics, culture and prosperity of Genoa, are one of those families, but they are doing things their own way.

Last year, representatives of the family began setting up an office in Singapore to manage their investments in the region, rather than using their Geneva-based operation Parly Co SA.

It is still early days for Parly Singapore as it applies for licenses and tests its bespoke portfolio management tools. The plan is to hire senior investment managers from top banks over the next year, with the 10 to 15 members of the team working under an advisory fee model rather than on commission.

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