Magazine issues » December 2019

Sponsored feature: Family offices looking to diversify through alternatives

Richard_NunnOne of the most significant trends in the wealth management sector over the past year has been the sustained rise of the family office, as high-net-worth families have sought to adopt increasingly sophisticated ways of managing their wealth. From a cross-border investment perspective, this professionalisation of the family office is highly pertinent, helping to drive the diversification of HNW investments from the mainstream, public markets to the alternative sectors, such as private equity, private debt, and hedge funds. This has real resonance for Jersey, which has earned a formidable reputation for providing private wealth services to Asian families. Today, for instance, Jersey holds around £400 billion of private client assets from around the world, with a growing proportion emanating from Asia. They are attracted by Jersey’s proposition as a centre with specific expertise, tried-and-tested trust case law, a good range of structures, a robust regulatory environment and a stable platform. However, the movement of family offices away from a ‘traditional’ approach towards a far more institutional style is providing synergies in another area where Jersey has huge strength – alternative funds. Jersey, for instance, recorded a new record total level of fund assets under administration in June 2019 of £342 billion, reflective of growing volumes of private equity, real estate and infrastructure fund activity. Alternatives now represent around 85% of Jersey’s total funds business. For the modern family office, navigating the global alternative fund landscape requires specific support, and drawing on the expertise of an international finance centre (IFC), like Jersey, that has considerable experience in navigating the alternatives space, and that fundamentally understands the world of the private client, is becoming increasingly attractive. With the Global Family Office Report 2019 (Campden Research/UBS) finding that private equity fared the best of all asset classes for family offices last year, and with family offices increasing their average holdings in real estate to 17%, the trend to allocate to alternatives looks set to continue – particularly as they look to place a greater weighting on ESG investing. Future
To understand these trends better and to ensure Jersey can continue to play a vital role in supporting the wealth management and investment ambitions of family offices, Jersey Finance recently published a white paper, looking at trends within the Asian family office landscape. What became clear through that paper was that the need for sophisticated support amongst family offices in Asia is going to continue, and that centres like Jersey, that can bring together decades of wealth management and alternatives fund experience, will become an increasingly important part of the family office infrastructure. Whether it’s pooling family wealth, providing co-investment solutions or providing access to global alternative opportunities, family offices in centres like Jersey can continue to find the right focus, expertise and practices to support their future ambitions. Jersey Finance’s full report, “The Evolution of Family Offices in Asia – Views from Asia’s Wealth Management Community” can be found at www.jerseyfinance.je/research. By Richard Nunn, Regional Head – East, Jersey Finance ©2019 funds global asia

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