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NEWSLETTER

Asia’s wealthy set to surpass Europe

All those grappling with the cost-of-living crisis might want to look away now as we bring you news of a massive increase in wealth across Asia.

The Preqin APAC Family Office report 2023 begins by informing us that by 2026, Asia is expected to surpass Europe as the second-largest regional wealth hub, with a 33 per cent increase in the number of ultra-high net worth individuals (those with more than USD30 million).

Yet hanging on to such wealth in trying economic times is not easy, particularly with global real GDP forecast to decline from 3.4 per cent in 2022 to 2.8 per cent this year.

The Preqin survey of APAC family offices says this productivity malaise has created three concerns for respondents: inflation (80 per cent), rising interest rates (70 per cent), and geopolitical risk (67 per cent). And when you have so much to invest you have much to lose which is exactly what respondents expect to happen this year.

Nearly half (46 per cent) predict their private equity portfolio will perform worse in the next 12 months than in the previous 12 thanks to stock market declines, while 63 per cent anticipate their real estate portfolio will perform worse this year than last.

Given they already have a lot on their plate, more than two fifths (43 per cent) of APAC family offices say they do not intend to put an ESG strategy in place.

However, some light came from alternative investments with respondents seeing the sector as “presenting the best opportunities over the next decade”, but even that was not without caveats. Preqin warns that as family offices navigate current market conditions, they “must remain nimble, adaptable, and open to new investment opportunities”.

Elsewhere the world’s biggest asset manager BlackRock continues to demonstrate its commitment to ramping up its tech capabilities in the battle to secure an even bigger market share.

Aladdin Wealth, BlackRock’s technology platform, has made a minority investment in Avaloq, which it says combines its own portfolio management capability with banking technology, software and services “to deliver an advanced technology offering to the wealth industry”.

This is just the latest move from BlackRock which started selling software as a service to rival asset managers more than 20 years ago. At the end of December last year BlackRock made 8 per cent of its revenue through Aladdin Wealth, a figure it clearly intends to add to thanks to its latest investment.

Beverly Chandler, Institutional Asset Manager managing editor and editor of IAM’s sister title, ETF Express, will be speaking and chairing a number of ETF sessions at Informa’s IMPower Fund Forum in Monte Carlo 27th and 28th June, 2023.

The agenda is here, and we are very pleased to be able to offer our readers a 10 per cent discount on tickets, using this link or this discount code FKN3253EMSPK.

Gill Wadsworth, Editor

For live updates please follow us on Twitter and LinkedIn.

LATEST NEWS

Avaloq, a subsidiary of NEC Corporation, and BlackRock, through its Aladdin Wealth business, have formed a strategic partnership aimed at enhancing their investment technology solutions for wealth managers and private banks. As part of the strategic partnership, BlackRock is making a minority investment in Avaloq.

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More from Institutional Asset Manager

Preqin has released its 2023 Asia Pacific (APAC) Family Office Report, which explores how APAC family offices evaluate performance and how they plan to adjust their allocations, especially in the context of rising interest rates, high inflation, geopolitical risks, and a slowdown in economic growth.
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