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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: There's been an explosion in the number of family offices

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Speaker 2: opening up in Asian financial hubs like Singapore and Hong Kong.

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Speaker 2: These are companies set up to help ultra rich families

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Speaker 2: manage their wealth.

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Speaker 1: You have everyone from James Dyson, the vacuum billionaire and tycoon,

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Speaker 1: to even Ray Dahlio, the hedge fund billionaire whose ship

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Speaker 1: was docked here in Singapore not too long ago.

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Speaker 2: David Ramley is Bloomberg's investing reporter based in Singapore, and

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Speaker 2: he says, along with all this growth, something strange is

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Speaker 2: happening in the family office world. He told us about

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Speaker 2: an encounter that happened a couple of years ago at

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Speaker 2: a conference in Singapore. It involved Eduardo Kolovekio, who is

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Speaker 2: managing director of a family office called Oppenheimer Generations Asia. Now,

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Speaker 2: Kolovekio was getting ready to go on stage with panelists

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Speaker 2: to talk about their industry when he realized something was

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Speaker 2: off about another panelist.

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Speaker 1: He was just having small talk, as you do with

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Speaker 1: other panelists. One of the panelists was from a firm

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Speaker 1: whose name he recognized because he'd done business with them before.

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Speaker 1: So he asked them some very innocuous questions about the

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Speaker 1: family principles, how they were doing, how are things, and

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Speaker 1: the guy's face just drew a complete blank. He couldn't

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Speaker 1: answer very simple questions about the principles about the family.

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Speaker 2: So Kolovikio did some quick digging around and it turned

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Speaker 2: out that this person who was supposed to be representing

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Speaker 2: this family office had never even worked directly with the

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Speaker 2: family office that he claimed to be a part of.

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Speaker 1: In other words, the person had exaggerated and managed to

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Speaker 1: get so far with that exaggeration that they were about

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Speaker 1: to go on stage at a conference in Singapore and

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Speaker 1: speak on behalf of the Family Office.

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Speaker 2: And David said, as the legitimate people who work in

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Speaker 2: this industry say, they are seeing this kind of thing

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Speaker 2: happen a lot lately.

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Speaker 1: They're encountering more and more of these sort of fake

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Speaker 1: or exaggerated family offices. They go out into the world

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Speaker 1: and attend conferences and events, and in some cases they're

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Speaker 1: even meeting people at government hosted events. That turned out

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Speaker 1: to be a little bit not quite right.

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Speaker 2: And while it's hard to say how many impostors are

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Speaker 2: out there, given the secretive nature of this industry. There

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Speaker 2: is a lot of money at stake. Family offices manage

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Speaker 2: trillions of dollars globally and just recently in Singapore, ten

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Speaker 2: people were convicted in relation to a two billion dollar

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Speaker 2: money laundring case and one structure some of them used

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Speaker 2: to hide the money family offices. Welcome to the Big

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Speaker 2: Take Asia from Bloomberg News. I'm one ha. Every week

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Speaker 2: we take you inside some of the world's biggest and

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Speaker 2: most powerful economies and the markets, tycoons and businesses that

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Speaker 2: drive this ever shifting region. Today on the show, a

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Speaker 2: new breed of impostors in Asia's family office business, and

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Speaker 2: how people in the wealth industry are getting creative to

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Speaker 2: weed out the fakes. When most people look for help

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Speaker 2: to manage their money, they usually go to banks, perhaps

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Speaker 2: hire brokers, or consult with financial strategists. But for the

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Speaker 2: ultra wealthy, there are family offices.

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Speaker 1: So a family office essentially is any kind of organization

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Speaker 1: set up by a family or a person to look

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Speaker 1: after their wealth or even their just life affairs. Some

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Speaker 1: people use the family offices to run assets like private

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Speaker 1: jets or properties around the world. I know one family

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Speaker 1: office that was responsible for everything from the philanthropy to

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Speaker 1: the food, the restaurants that people would go to and

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Speaker 1: get booked into.

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Speaker 2: How much money do you actually need to set up

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Speaker 2: a family office?

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Speaker 1: So this is a problem that we faced. The definition

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Speaker 1: of a family office doesn't necessarily encompass a set amount

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Speaker 1: of money. But when I first started looking at it

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Speaker 1: here in Singapore, what I was told by various parties

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Speaker 1: is the rule of thumb, and that rule of thumb

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Speaker 1: is you really want to have liquid assets of at

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Speaker 1: least one hundred to one hundred and fifty million US

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Speaker 1: dollars because it costs one to one point five million

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Speaker 1: US dollars each year to run a family office, and

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Speaker 1: therefore anything smaller than that is cheaper to use external

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Speaker 1: service providers, lawyers, bankers, et cetera to do all the

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Speaker 1: things that you need them to do.

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Speaker 2: And this type of office is booming in Asia, David

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Speaker 2: tells us. Part of the reason that's happening is that

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Speaker 2: governments in this region are ruling out the red carpet

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Speaker 2: for family offices, dishing out tax benefits to attract them.

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Speaker 1: What you're seeing is it being used as almost as

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Speaker 1: a buzzword for governments from Hong Kong to Singapore and

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Speaker 1: even in the Middle East in the UAE to draw

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Speaker 1: super wealthy families and their businesses. Because as hedge funds

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Speaker 1: and other investors start looking for family office money, governments

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Speaker 1: also want family officers to come so that other investors

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Speaker 1: in other parts of the finance sector also want a

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Speaker 1: base there and turn that place into a hub. And ultimately,

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Speaker 1: from Dubai to Abu Dhabi to Singapore and Hong Kong,

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Speaker 1: everyone wants to be a massive finance hub for almost

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Speaker 1: every category.

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Speaker 2: And so far this courting seems to be working.

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Speaker 1: Family officers have traditionally been this very sleepy, boring part

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Speaker 1: of the finance sector. It's not cool like hedge funds, right,

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Speaker 1: you don't get TV shows on family officers. But recently,

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Speaker 1: thanks to the rapid growth in Asia and thanks to

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Speaker 1: the popularization of the term, it's suddenly become one of

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Speaker 1: the hottest spaces to be in globally, but especially in

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Speaker 1: this part of the world. If you look at Singapore alone,

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Speaker 1: for example, the number of family officers that have taxis

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Speaker 1: emptions because their family offices has grown from just two

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Speaker 1: hundred in twenty nineteen to oney four hundred as of

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Speaker 1: twenty twenty. Three, and we're only talking about the number

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Speaker 1: of family offices with tax exemptions registered at the monetary

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Speaker 1: authority of Sandpoor.

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Speaker 2: And so it's not hard to imagine why some people

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Speaker 2: would be looking to lie or fake their way into

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Speaker 2: a growing industry like that.

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Speaker 1: When you have something that is suddenly so cool, you

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Speaker 1: see it as this jewel on the hill, and you

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Speaker 1: really want to run towards it. You want to be

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Speaker 1: part of it. You want to say, yes, I also

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Speaker 1: work at a family office, or I have a family office.

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Speaker 1: You know, one person compared it to joining a prestigious

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Speaker 1: golf club. Now you might not even really enjoy golf,

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Speaker 1: but you join up because you want to have some

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Speaker 1: of that magic rub off onto you.

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Speaker 2: And David says, one place where you can clearly see

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Speaker 2: the advantages of being part of this exclusive circle is

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Speaker 2: on the conference circuit.

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Speaker 1: If you go to any of the conference is nowadays

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Speaker 1: that are held in Singapore, Hong Kong and other places.

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Speaker 1: There's always this differentiation in class, right, So if you

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Speaker 1: say you're from a family office, or you say you're

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Speaker 1: from an institutional investor, you get in no cost. You're

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Speaker 1: eating the food for free, you're drinking the free wine

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Speaker 1: and the sponsored dinners, and importantly you get there and

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Speaker 1: you even get access to investor only sessions, panels or events,

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Speaker 1: so you're in the in crowd automatically as screened by

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Speaker 1: the conference organizers. That's a very alluring thing for some people.

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Speaker 2: The conferences are one way for those who want access

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Speaker 2: to the family office world to get their foot in

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Speaker 2: the door. And that's because this world is so hard

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Speaker 2: to crack. It's long been known for its secrecy.

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Speaker 1: We're talking about in industry that while it has certain

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Speaker 1: circles and certain groups of people, you very rarely start

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Speaker 1: getting put up on your LinkedIn as a workplace. You know.

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Speaker 1: One example I have in this store is that Marie Young,

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Speaker 1: who's the very highly regarded chief investment officer for the

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Speaker 1: family Office of Sergey Brinn, who obviously co founded at Google,

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Speaker 1: her LinkedIn has simply said that she's from a Californian

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Speaker 1: family office. There's no name, there's no details. The whole

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Speaker 1: point of family office is genuinely you will almost never

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Speaker 1: know who has a family office if they're running it

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Speaker 1: the right way.

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Speaker 2: But all this secrecy also means it can be really

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Speaker 2: difficult to figure out who's legit.

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Speaker 1: And who's not because there is no definition for family

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Speaker 1: office technically speaking, are these people even lying if they're exaggerating,

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Speaker 1: that's a sort of definitionue right, But it makes the

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Speaker 1: job of trying to ferret out exaggerators and fake is

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Speaker 1: quite difficult when combined with the fact that even the

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Speaker 1: real players in family office are often so vague and

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Speaker 1: vacuous in their LinkedIn profiles and their public personas.

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Speaker 2: After the break, well here the lengths that the wealth

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Speaker 2: industry is going to to ferret out the fakes.

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Speaker 3: And when he started to share some stipulets about the

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Speaker 3: mismatch of information, each of us were also having interaction

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Speaker 3: with that same individual. And then it started to then, oh, yes,

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Speaker 3: now I'd understand why it's only info was somewhat on

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Speaker 3: the gray area.

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Speaker 2: A growing industry with secrecy at its foundation makes it

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Speaker 2: tough to catch impostors and hard to know just how

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Speaker 2: many bad actors there might be in the family office space.

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Speaker 2: Another reason a lack of regulation.

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Speaker 1: If I were to open up a hedge fund or

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Speaker 1: a venture capital firm, I would need to get a

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Speaker 1: license and be regulated. But because family offices are theoretically

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Speaker 1: an extension of ultra high networth. All I need to

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Speaker 1: do to become a family office owner here in Singapore

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Speaker 1: without technically lying, is to register a corporate entity, label

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Speaker 1: it as a family office in the back end, and

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Speaker 1: that if I wanted, however, to actually get the full benefits,

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Speaker 1: be it an employment pass for my staff or a

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Speaker 1: tax exemption for my gains, that's where I start to

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Speaker 1: interface with more government agencies and I need to get

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Speaker 1: those exemptions approved. It's similar in most jurisdictions, but it

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Speaker 1: means that if you go to London, New York, Singapore,

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Speaker 1: Hong Kong or Dubai, you can start a family office

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Speaker 1: just without those benefits.

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Speaker 2: So without clear ways to know who's legitimate and who's not,

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Speaker 2: those working in the family office space have resorted to

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Speaker 2: figuring it out for themselves. And one place where this

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Speaker 2: kind of amateur detective work is happening is on messaging

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Speaker 2: groups like we Chat and WhatsApp set up by the

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Speaker 2: community hither Eric, can you hear me?

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Speaker 3: Yes allowing too?

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Speaker 2: Eric sewey Neo is a member of one of these groups.

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Speaker 2: He's board director of a family office called Midway Investments,

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Speaker 2: and he told us of an experience he had with

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Speaker 2: someone who said they represented a family office.

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Speaker 3: So however, first got acquainted with this person who was

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Speaker 3: through LinkedIn, and subsequently we corresponded. You know, it was

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Speaker 3: very cordial, it was it looks so normal, right, They

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Speaker 3: talked like a family office. You know, they would have

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Speaker 3: similar mention of GP names conferences that we do get

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Speaker 3: invited to attend, they would have the same access or

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Speaker 3: even know the same organizer.

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Speaker 2: Neil says. Several members had interactions with this individual, and

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Speaker 2: then a member of the group shared a photo that

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Speaker 2: raised a lot of questions.

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Speaker 3: So one of the one of the community member shared

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Speaker 3: a screenshot of all name cards that he had our

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Speaker 3: dad individual representing different companies of family officers. I think

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Speaker 3: it's a boat one, two, three, three, four name cards.

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Speaker 3: And it was all within less than a year. And

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Speaker 3: if you come from a family office or you work

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Speaker 3: for a family right, it's quite rare that you change

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Speaker 3: to different family offices representing different families within in the

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Speaker 3: less than a year.

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Speaker 2: And there were other things that didn't add up. Digging

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Speaker 2: into their past, members of the group learned the individual

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Speaker 2: had lied about their education and that some of the

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Speaker 2: firms they claimed to have worked for didn't even.

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Speaker 3: Exist, and that's where you know. I started to ask

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Speaker 3: which family office do you represent and who is the

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Speaker 3: principal and the individual couldn't even give a name.

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Speaker 2: Eric, it sounds like you guys all put on your

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Speaker 2: detective hats to investigate this person.

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Speaker 3: Correct, yeah, or you can call it s a scientists

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Speaker 3: of factual investigation.

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Speaker 2: Neo says the administrator kicked this individual out of the

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Speaker 2: message in group, and he says if he and other

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Speaker 2: family office professionals are tricked into sharing information with people

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Speaker 2: who misrepresent their role, it could have a cost.

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Speaker 3: We don't want to run into a risk of exposing

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Speaker 3: unnecessarily critical, sensitive private information to someone that we thought

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Speaker 3: was legitimate right to a private banker. We also don't

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Speaker 3: share a lot of things, but from a principle to

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Speaker 3: principal perspective, we do.

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Speaker 2: Neo says. The community worries that the information they share

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Speaker 2: in private could be used in unintended ways, and a

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Speaker 2: recent high profile case in Singapore has presented a real

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Speaker 2: threat to the wealth sector's reputation and put people like

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Speaker 2: NEO more on guard. Unfolding scandal that have seen at

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Speaker 2: least ten people arrested in connection with this alleged money

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Speaker 2: laundering case. The ten people who were convicted with crimes

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Speaker 2: in that massive money laundering scandal in Singapore had links

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Speaker 2: to at least five family offices among them. That's according

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Speaker 2: to documents reviewed by Bloomberg News and people familiar year

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Speaker 2: with the.

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Speaker 3: Matter, with many individuals that was caught with different passports

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Speaker 3: and everything. So it's self titlished the wealth industry to

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Speaker 3: some extent. And so I think the interested parties that's

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Speaker 3: really going full cs on these basically with the best

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Speaker 3: interest to say, look, we want to maintain the integrity

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Speaker 3: of the industry. We want to maintain the integrity of

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Speaker 3: the family office people, whether you're professionals or principles yourself,

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Speaker 3: let's help protect one another.

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Speaker 2: Of course, one path to possibly preventing fraud in this

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Speaker 2: industry is regulation. I asked a reporter David if more

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Speaker 2: regulation could help weed out the bad actors.

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Speaker 1: So, needless to say, the people in this industry, both

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Speaker 1: real and fake, are very wary of regulation. It's something

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Speaker 1: that they don't think is necessary or welcomed. One point

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Speaker 1: made by a gentleman from UBS is that the bigger

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Speaker 1: the family office and the more money they have, the

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Speaker 1: less these people would want to be on a register

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Speaker 1: because they are so private in both the case a

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Speaker 1: real family officers and the case of fake or exaggerated

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Speaker 1: family officers. We are, however, seeing some jurisdictions like Singapore,

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Speaker 1: starting to see certain places get stricter trying to differentiate

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Speaker 1: between the more real family officers and the faker family officers.

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Speaker 1: So everything from the annual report that family officers need

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Speaker 1: to supply to the Monetary Authority of Singapore in order

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Speaker 1: to continue qualifying from tax exemptions, that's getting more stringent

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Speaker 1: and more difficult. In fact, the most recent version I've

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Speaker 1: seen specifically asks family officers if they have either been

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Speaker 1: charged with or found guilty of money laundering or terrorism financing,

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Speaker 1: not just in Singapore but any jurisdiction.

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Speaker 2: A spokesperson from the Monetary Authority of Singapore told Bloomberg

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Speaker 2: that potential money laundering is the key risk linked to

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Speaker 2: wealth inflows from family offices, and to address that, Singapore

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Speaker 2: and authorities are ramping up scrutiny of family offices and

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Speaker 2: demanding more disclosures from them. But David says the secrecy

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Speaker 2: that makes it easier for bad actors to operate isn't

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Speaker 2: going away anytime. Soon.

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Speaker 1: I think any industry where you have limited regulation and

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Speaker 1: you have maximum interest combined with huge fun flows is

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Speaker 1: always going to be ripe for good and bad actors,

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Speaker 1: and this is no different from that. To be Rich's glorious.

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Speaker 1: Part of that glory comes with being quiet when you

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Speaker 1: want to be quiet, and loud when you want to

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Speaker 1: be loud.

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Speaker 2: This is The Big Take Asia from Bloomberg News. I'm wanh.

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Speaker 2: This episode was produced by Young Young Jessica Beck, Thomas

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Speaker 2: Lou and Naomi Um. It was mixed by Blake Maples

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Speaker 2: and fact checked by Adriana Tapia. It was edited by

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Speaker 2: Caitlin Kenny, Claire Ballentine, and Brian Chapada, additional reporting from

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Speaker 2: Lulu E. Lun Chen and Claire Balentine. Our senior producers

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Speaker 2: are named Shaven and Kim Gettleson. Our senior editor is

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Speaker 2: Elizabeth Ponso, Nicole Beemster Bower is our executive producer, and

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