Asia’s Super Rich Eye More Private Equity Investments

Asia’s richest families will shift even more of their investments to alternative asset classes in the next two to three years after doubling their direct allocations to private equity in 2021, according to UBS Group AG.

In Asia Pacific, 40% of the family offices plan to increase direct private equity allocations, while 18% intend to raise investments in private equity funds and funds of funds, according to UBS’s Global Family Office Report 2022. Investors are likely to target sectors such as automation and robotics, the report said.

Private equity has become the most popular alternative asset class in both Asia Pacific and globally due to higher returns than public markets, the report found. Global offices are looking to diversify their portfolio against the backdrop of challenges including high inflation rate, rising geopolitical tensions and flagging central bank liquidity.

“To achieve the objective of growing wealth, the family offices must adopt a fundamental strategic shift in their investments,” LH Koh, APAC co-head of global family and institutional wealth said at a briefing.To navigate the volatility caused by various factors, there is an “active seeking” of alternative ways of investing, he said.