WEBVTT - Why Singapore Has Become a Family Office Hotspot 0:00:02.600 --> 0:00:07.440 You're listening to Asia Centric from Bloomberg Intelligence, the podcast 0:00:07.520 --> 0:00:10.600 that pulls back the curtain non global business so you 0:00:10.720 --> 0:00:14.880 can invest better across the Pacific rim. I'm Tom Corbett 0:00:14.880 --> 0:00:17.160 in Hong Kong and I'm John Lee. 0:00:17.440 --> 0:00:21.520 Family Officers. They're the personal investment firms of uber rich, 0:00:21.880 --> 0:00:25.760 and along with mansions, yachts and private jets, they symbolize 0:00:25.760 --> 0:00:29.400 the trappings of wealth, power and privilege here in Asia. 0:00:29.560 --> 0:00:33.640 Singapore is becoming the new family office hotspot, wooing the 0:00:33.800 --> 0:00:39.080 rich with low taxes, business friendly policies, favorable regulations and 0:00:39.240 --> 0:00:44.080 an unbeatable location. Singapore's family office scene is booming, with 0:00:44.200 --> 0:00:47.920 more than one one hundred firms setting up shop there, 0:00:48.080 --> 0:00:50.920 up from just four hundred in twenty twenty. Make it 0:00:51.080 --> 0:00:53.800 home to more than four trillion dollars in assets. 0:00:54.320 --> 0:00:58.840 Google's Sergey Brinn and hedge fund billionaire Ray Dahlia are 0:00:58.960 --> 0:01:03.000 among those setting up shop. But why is Singapore such 0:01:03.040 --> 0:01:05.560 a draw for the world's billionaires? 0:01:06.000 --> 0:01:08.559 He's the growth sustainable and what are the risks? 0:01:08.600 --> 0:01:14.200 I hit Let's talk Singapore family offices with Sharon sim 0:01:14.400 --> 0:01:19.039 Family Office CEO. She's also a venture capitalist, a TV 0:01:19.160 --> 0:01:22.800 host and soon to be author of the coming book 0:01:23.280 --> 0:01:28.479 Why Women Don't Talk Money. Sharon, it's great to have you, Hi. 0:01:28.400 --> 0:01:31.960 Tom, Hi John. It's really great to be here with you, Sharon. 0:01:32.040 --> 0:01:35.720 Why is Singapore so attractive to set up a family office. 0:01:36.240 --> 0:01:40.160 I think Singapore has been very proactive in promoting Singapore 0:01:40.200 --> 0:01:42.400 as a wealth hub, and I think we have been 0:01:42.480 --> 0:01:45.759 cariting this process since twenty twelve. There's a lot more 0:01:45.800 --> 0:01:49.680 infrastructure and the government has been very supportive in terms 0:01:49.680 --> 0:01:53.760 of taxation text policies have been very favorable for new 0:01:54.040 --> 0:01:57.800 capital coming into Singapore. But I think the pivotal point 0:01:57.920 --> 0:02:01.800 for a family officers started about you mentioned three years ago, 0:02:01.920 --> 0:02:06.040 from twenty twenty onwards. Firstly, I think it's driven by 0:02:06.120 --> 0:02:09.960 what we have gone through during the pandemic. So during pandemic, 0:02:10.000 --> 0:02:14.440 Singapore went through similar lockdowns as most Asian countries. What 0:02:14.639 --> 0:02:18.240 is different, I think is how Singapore's policies have helped 0:02:18.480 --> 0:02:22.000 to mitigate a lot of the downside from COVID example, 0:02:22.080 --> 0:02:24.800 in terms of how we manage the whole quarantine system, 0:02:25.360 --> 0:02:27.680 how we have you know, make sure that the vaccination 0:02:27.760 --> 0:02:30.960 has been done very systematically in terms of many phases 0:02:30.960 --> 0:02:33.600 we've gone through. So that's given the ultra rich a 0:02:33.720 --> 0:02:36.160 sense that Singapore is a great place to be, not 0:02:36.200 --> 0:02:39.800 only for safety, but also I think the general sense 0:02:40.000 --> 0:02:43.280 that the government is really in control about how they 0:02:43.320 --> 0:02:47.120 manage various policies, which include helping a lot of the 0:02:47.120 --> 0:02:50.600 families settle into Singapore. The second point I think is 0:02:50.639 --> 0:02:54.240 maybe less well spoken about is actually the establishment of 0:02:54.360 --> 0:02:58.840 the VCC structure in Singapore. That's a variable capital company 0:02:59.160 --> 0:03:02.120 which was introduced us an early part of twenty twenty. 0:03:02.400 --> 0:03:05.359 It's actually a fund management structure, is a fund structure 0:03:05.880 --> 0:03:09.080 very similar to what we've seen in cabans, whereby we 0:03:09.200 --> 0:03:13.160 have umbrella structures, we have individual sub funds. And I 0:03:13.160 --> 0:03:15.600 think that really helps to propelsing and port forward as 0:03:15.639 --> 0:03:19.120 a really attractive place for ultra high network because, as 0:03:19.160 --> 0:03:22.239 we know, the fund structure is actually much simplified. Unlike 0:03:22.400 --> 0:03:26.080 trust you don't need to have a trustee for a VCC. 0:03:26.240 --> 0:03:29.880 You can issue and also redeem shares very efficiently without 0:03:29.880 --> 0:03:33.320 shareholder approval. And I think lastly as well, there is 0:03:33.480 --> 0:03:37.280 less financial reporting for all of the VCC funds. 0:03:37.680 --> 0:03:40.920 Sharon, who are the people setting up these family officers? 0:03:41.080 --> 0:03:45.280 Are they Chinese billionaires wishing to diversify out of China 0:03:45.880 --> 0:03:48.120 or they you know, people that made it in crypto. 0:03:48.760 --> 0:03:50.040 Is there a particular trend. 0:03:51.000 --> 0:03:54.040 I think all of the above, John is really really 0:03:54.120 --> 0:03:57.000 China money. As we know right a lot of billionaires, 0:03:57.080 --> 0:03:59.720 and also I think newly created well from China has 0:03:59.760 --> 0:04:03.160 been coming into Singapore and the Hong Kong And also 0:04:03.200 --> 0:04:07.240 I would say during the peak of crypto Domania, we 0:04:07.320 --> 0:04:10.600 did see a lot of crypto driven ventures setting up 0:04:10.600 --> 0:04:13.360 in Singapore. So we do have a very thriving Web 0:04:13.440 --> 0:04:16.880 three community in Singapore. But I think what's also important 0:04:16.920 --> 0:04:20.039 to understand is that it's not just China money. That's 0:04:20.080 --> 0:04:22.000 really the fleshy part of things. You would like to 0:04:22.040 --> 0:04:24.640 talk about all the billionaires from China, but what we 0:04:24.680 --> 0:04:27.760 have seen is also from the rest of Southeast Asia, 0:04:28.000 --> 0:04:31.839 particularly Indonesia, which is one of our neighboring countries and 0:04:32.000 --> 0:04:35.640 have always been very familiar with Singapore. Overall, part of 0:04:35.640 --> 0:04:40.520 it is new wealth driven by new technology IPOs, also 0:04:40.839 --> 0:04:44.039 old wealth really deciding that Singapore is the place to 0:04:44.120 --> 0:04:47.400 be for your future generations. And also thirdly we've seen 0:04:47.560 --> 0:04:50.000 a boom in commodities back in Indonesia. 0:04:50.640 --> 0:04:56.600 Sharon sim we've heard anecdotal media reports of ambitious finance 0:04:56.720 --> 0:05:00.120 majors and people in the industry rushing to try to 0:05:00.160 --> 0:05:04.000 fill these jobs in family offices. Are the jobs really 0:05:04.160 --> 0:05:08.039 that coveted, and if they are, what's the draw What 0:05:08.200 --> 0:05:11.160 do family offices look for in a workforce. 0:05:12.040 --> 0:05:15.120 I think there's always been a challenge in Singapore finding 0:05:15.120 --> 0:05:18.440 the right talent with the right jobs, particularly in family 0:05:18.480 --> 0:05:22.480 offices where things are still evolving very quickly. So I 0:05:22.520 --> 0:05:25.720 would say that there are jobs available. In fact, we've 0:05:25.760 --> 0:05:29.680 seen a lot more hiring from single family offices and 0:05:29.920 --> 0:05:33.719 also multi family offices. However, I think the profile of 0:05:33.880 --> 0:05:37.360 the candidates are different. I would say it's very specific. 0:05:37.839 --> 0:05:41.360 Back to your point about younger or what junior bankers 0:05:41.360 --> 0:05:44.440 thinking about making the switch, I think I've seen less 0:05:44.480 --> 0:05:48.080 of that. I've seen a lot more senior positions being filled, 0:05:48.320 --> 0:05:54.240 meaning CEO levels or CIO levels, especially for multi family offices. 0:05:54.480 --> 0:05:57.800 Is really targeting the very established private bankers right with 0:05:57.800 --> 0:06:02.159 strong client relationships the ability to actually bring asset under 0:06:02.200 --> 0:06:05.960 management up for the multi family offices. Another point to note, 0:06:05.960 --> 0:06:09.279 of course, is family offices by definition are very different. 0:06:09.400 --> 0:06:12.160 Each one is different from the other. Definitely, there's a 0:06:12.200 --> 0:06:15.120 lot of chemistry that need to happen with the principles. 0:06:15.560 --> 0:06:19.080 It's really not so straightforward as filling in a candidate 0:06:19.120 --> 0:06:23.000 with the right technical skills or the right financial background. 0:06:23.400 --> 0:06:25.880 It has to be combination of factors where you know, 0:06:25.920 --> 0:06:29.640 it's actually the personality fit, also the understanding of the 0:06:29.680 --> 0:06:33.279 family dynamics, and also the role that's required to be played. 0:06:33.640 --> 0:06:36.640 For instance, back in twenty nineteen, I started my own 0:06:36.760 --> 0:06:40.640 multi family office. The challenge is really finding the right 0:06:40.760 --> 0:06:43.960 personality for the role. Why do I say that, because 0:06:43.960 --> 0:06:46.240 I think it's really as startup. If you think about it, 0:06:46.560 --> 0:06:49.880 we're actually building a business from ground up. You have 0:06:50.000 --> 0:06:52.480 to be ready to roll up your sleeves. You make 0:06:52.480 --> 0:06:55.000 sure you know where to find the right rentals for 0:06:55.120 --> 0:06:59.240 the offices, how to establish technology, how do we implement 0:06:59.520 --> 0:07:02.680 compliance policies. So everything has been created. 0:07:02.279 --> 0:07:04.880 From ground up, and because the skill set is so 0:07:05.200 --> 0:07:09.760 precise and the talent pool perhaps relatively narrow, I would 0:07:09.760 --> 0:07:14.080 imagine that compensation packages are probably commensurate with that. 0:07:14.080 --> 0:07:17.760 That's a great question in theory. You're right, Tom, I 0:07:17.760 --> 0:07:20.000 think what we have seen in reality is that there 0:07:20.040 --> 0:07:22.440 has been a bit of a discount to join a 0:07:22.480 --> 0:07:25.520 family office. And this is something that is also very 0:07:25.560 --> 0:07:28.240 puzzling to all of us in the industry because, as 0:07:28.280 --> 0:07:31.000 you mentioned, it's a lot more work to join a 0:07:31.040 --> 0:07:34.080 newer setup in a family office. And also, I think 0:07:34.200 --> 0:07:37.200 the other point which is probably less appreciated, so the 0:07:37.360 --> 0:07:40.720 risk that we are taking to leave your institution, to 0:07:40.840 --> 0:07:43.720 leave a very comfortable role within a bank, for example, 0:07:44.160 --> 0:07:47.800 to join a startup. So unfortunately we have not seen 0:07:47.840 --> 0:07:51.360 the gap narrowing in Singapore. But if we reference what's 0:07:51.400 --> 0:07:54.240 going on in the US and Europe with the family 0:07:54.280 --> 0:07:58.760 office space is a lot more mature, a lot more professionalized. 0:07:59.120 --> 0:08:01.960 I think that describe and see or that premium is 0:08:02.000 --> 0:08:03.280 actually much clearer. 0:08:03.920 --> 0:08:06.880 Sharon, you alluded to the fact that overseas, family offices 0:08:06.880 --> 0:08:09.160 are a lot more mature. I know that in Europe, 0:08:09.200 --> 0:08:12.160 maybe in Switzerland, family offices have been around for two 0:08:12.240 --> 0:08:15.200 hundred years. It seems like in Singapore that the industry's 0:08:15.200 --> 0:08:17.480 grown in the last fifteen years. What are the big 0:08:17.480 --> 0:08:21.239 differences between working in a family office in Singapore versus, say, 0:08:21.320 --> 0:08:22.960 in Switzerland or elsewhere. 0:08:23.920 --> 0:08:26.680 I would say the difference is really the maturity of 0:08:26.800 --> 0:08:30.000 the wealth In Asia. I think we're looking at maybe 0:08:30.080 --> 0:08:34.800 first or second generation wealth and a lot of the 0:08:34.840 --> 0:08:37.760 families in Asia still run the business right, so they're 0:08:37.760 --> 0:08:41.800 still very much involved in operations and expansion of the 0:08:41.840 --> 0:08:45.599 family business. So they have not really had the opportunity 0:08:45.840 --> 0:08:49.280 to dispose of the family business and so therefore the 0:08:49.320 --> 0:08:53.480 liquidity situations very different from Switzerland, from Europe where the 0:08:53.559 --> 0:08:57.560 families have been multi generational, so the wealth has been 0:08:57.720 --> 0:09:01.360 changed over the years. The probably sold most of their 0:09:01.400 --> 0:09:05.240 original businesses and they're really just managing the wealth for 0:09:05.360 --> 0:09:08.600 families and future generations. So I think the fact that 0:09:08.760 --> 0:09:12.240 Asian wealth is still very young, very nascent. We have 0:09:12.320 --> 0:09:15.640 not even seen the transferred wealth to the next gen. 0:09:15.880 --> 0:09:18.600 The principles, for example, in most of the Asian family 0:09:18.640 --> 0:09:22.000 offices are still very hands on, so they like to 0:09:22.080 --> 0:09:25.600 understand where they're doing the investment. A lot of them 0:09:25.640 --> 0:09:29.319 do sit in the investment committee, so all the meetings 0:09:29.760 --> 0:09:32.920 the strategy of how the wealth is being deployed, so 0:09:32.960 --> 0:09:35.560 they do have that control, which is very typical of 0:09:35.720 --> 0:09:36.600 Asian families. 0:09:37.400 --> 0:09:39.960 Sharon sim if I read between the lines, it suggests 0:09:40.040 --> 0:09:43.400 that perhaps the greatest portion of the coming wealth boom, 0:09:43.800 --> 0:09:46.679 it still lies ahead of us. Am I right, I. 0:09:46.640 --> 0:09:49.000 Believe, So, I think there's a lot more that would 0:09:49.040 --> 0:09:52.720 happen with the transfer of wealth. We have seen reports 0:09:52.760 --> 0:09:56.960 where wealth acts is inciting two trillion of wealth in 0:09:57.040 --> 0:09:59.840 Asia that's going to be transferred to the next generation, 0:10:00.559 --> 0:10:04.240 and I think with this passing on the torch, you 0:10:04.360 --> 0:10:07.800 definitely would have the next generation looking at well preservation 0:10:08.120 --> 0:10:10.800 a lot differently. I think this is a good lead 0:10:10.840 --> 0:10:15.199 in to see how the nixttion viewing family offices and investment, 0:10:15.280 --> 0:10:18.440 which is very different from their parents, from their grandparents. 0:10:19.000 --> 0:10:22.360 A lot of them are very focused on doing good right, 0:10:22.440 --> 0:10:26.120 so it's not just about making investment returns. It's about 0:10:26.160 --> 0:10:29.040 creating the right impact. We have seen the rise of 0:10:29.280 --> 0:10:35.120 family officers looking at ESG investments, climate change philanthropy to 0:10:35.160 --> 0:10:38.480 a certain extent, I think next generation do want to 0:10:38.640 --> 0:10:41.480 make sure that they understand how their money is being 0:10:41.480 --> 0:10:45.040 deployed and the impact is creating for the causes that 0:10:45.040 --> 0:10:45.640 they believe in. 0:10:45.880 --> 0:10:48.400 How big a concern is legacy For the ultra high 0:10:48.480 --> 0:10:50.080 networth individual. 0:10:50.280 --> 0:10:53.920 It's important. I think they all feel very strongly that 0:10:54.000 --> 0:10:57.040 they want to give back. They have been very successful 0:10:57.080 --> 0:11:00.800 in life. They want to make sure that their success continues. 0:11:01.320 --> 0:11:05.360 So we have seen traditionally pure philanthropy, meaning just donating 0:11:05.440 --> 0:11:08.600 money to various causes. As I mentioned, I think the 0:11:08.600 --> 0:11:11.400 complexion of that has been changing. A lot of this 0:11:11.640 --> 0:11:15.319 money for philanthropy is kind of mixed together with so 0:11:15.400 --> 0:11:20.240 called impact investing, where they're bringing together purpose with profit. 0:11:20.720 --> 0:11:23.199 So I think with the right point, right time, where 0:11:23.320 --> 0:11:25.680 there are a lot more options for family officers to 0:11:25.880 --> 0:11:30.400 deploy that capital very thoughtfully, either through venture capital funds, 0:11:30.760 --> 0:11:34.640 very specific climate type funds. Were also seeing a lot 0:11:35.000 --> 0:11:39.000 esg funds getting funding from family offices, and to a 0:11:39.080 --> 0:11:42.920 certain extent, even pure venture capital, because I think the 0:11:43.040 --> 0:11:45.960 next generation is very conscious about how they want to 0:11:46.040 --> 0:11:47.000 change the world. 0:11:47.160 --> 0:11:51.040 So Sharon, is the next generation more admenable to investing 0:11:51.080 --> 0:11:53.520 in private assets. You sort of mentioned venture capital, but 0:11:53.559 --> 0:11:58.000 private equity, private debt, infrastructure versus say a traditional sixty 0:11:57.960 --> 0:12:00.520 to forty equity fixing COMPORTFOLI. 0:12:01.280 --> 0:12:03.559 We have really seen that happening, I think in terms 0:12:03.559 --> 0:12:06.839 of how the asset allocation within the family office space 0:12:06.880 --> 0:12:10.760 has been evolving. So sixty forty clearly is very traditional, 0:12:10.880 --> 0:12:13.679 and most of the banks have been kind of advising 0:12:13.840 --> 0:12:17.439 the portfolios to be diversified that way. But I think 0:12:17.440 --> 0:12:20.160 with recent times what we've seen is with the volatility, 0:12:20.360 --> 0:12:24.199 with inflation, with how the markets are being more dislocated, 0:12:24.559 --> 0:12:27.480 there's a lot more attention being paid to private equity, 0:12:28.080 --> 0:12:30.679 and now I think it's really private debt. So private 0:12:30.720 --> 0:12:33.120 debt is having this day in the sun where there's 0:12:33.160 --> 0:12:36.400 a lot more interest from family offices given where interest 0:12:36.480 --> 0:12:39.280 rates are going, and also the fact that there is 0:12:39.320 --> 0:12:41.440 going to be a bit of a distress in many 0:12:41.520 --> 0:12:44.440 many areas of the economy, so you know, having debt 0:12:44.520 --> 0:12:48.320 as a way to diversify that risk is great. So 0:12:48.360 --> 0:12:51.280 I think we've seen the progression of asset allocation over the. 0:12:51.320 --> 0:12:55.920 Years, Sharon, As investors, when we make an investment decision, 0:12:56.080 --> 0:12:59.679 we like to look both up and down when assessing 0:12:59.800 --> 0:13:03.720 the risk and the opportunity. From a family office standpoint, 0:13:03.720 --> 0:13:07.719 do you see any risks to the explosive growth in 0:13:07.880 --> 0:13:09.760 family offices and private wealth? 0:13:10.440 --> 0:13:13.240 I think the questions whether it's sustainable, right, I mean, 0:13:13.280 --> 0:13:15.800 the corrects are signing to show a little bit in Singapore, 0:13:16.360 --> 0:13:18.679 So I think this is quite clear from the recent 0:13:19.000 --> 0:13:21.880 announcement by MAS. Right, So what's going on right now 0:13:22.000 --> 0:13:25.800 is that MAS has announced late October that they're going 0:13:25.840 --> 0:13:30.280 to repeel the RFMC regime. That's actually the registered fund 0:13:30.280 --> 0:13:33.520 management companies and there are about two hundred eighty of 0:13:33.559 --> 0:13:37.280 them currently in Singapore. What that means is that MAS 0:13:37.400 --> 0:13:42.000 is trying to slow down firstly new applications for fund 0:13:42.040 --> 0:13:45.480 mentionment companies and secondly it's a bit of a consolidation 0:13:45.640 --> 0:13:49.080 move where the intention is to see up the fund 0:13:49.080 --> 0:13:52.320 mentionment companies that are driving and those that maybe are 0:13:52.360 --> 0:13:55.920 a little bit suboptimal, and to incentivize them to really 0:13:56.000 --> 0:14:00.160 rethink the business strategy. We have heard stories about how 0:14:00.160 --> 0:14:04.720 applications for family offices and also for fund menationement companies 0:14:04.760 --> 0:14:08.600 are being delayed. The wait time for applications have stretched 0:14:09.000 --> 0:14:12.040 from the usual four to six months to what we're 0:14:12.080 --> 0:14:15.360 hearing now on the grounds between even nine to twelve months. 0:14:15.640 --> 0:14:20.440 SAR was the MIAs rules in response to the big 0:14:20.520 --> 0:14:24.520 money laundering scandal in Singapore where the authority is uncovered. 0:14:24.600 --> 0:14:28.160 I think two billion dollars in cash, crypto properties, fast 0:14:28.200 --> 0:14:30.640 cars was all over the press, but was that the case. 0:14:31.960 --> 0:14:35.640 There's no official confirmation or denial of that. The big 0:14:35.680 --> 0:14:37.520 case that we've all talked about. You know, the two 0:14:37.560 --> 0:14:41.040 billion dollars is a huge number, and also I think 0:14:41.080 --> 0:14:45.280 there has much longer implication on how bank accounts are 0:14:45.320 --> 0:14:49.360 being set up, how the process of approval for ultra 0:14:49.440 --> 0:14:52.440 high network from all over the world coming to Singapore. 0:14:52.600 --> 0:14:54.800 It's going to be a lot more scrutiny going forward. 0:14:55.240 --> 0:14:57.200 So I think it's a trigger to kind of slow 0:14:57.240 --> 0:15:01.080 things down. But inherently I think the capacit of Singapore 0:15:01.160 --> 0:15:04.600 to bring in or to accept more capital. It's also 0:15:04.720 --> 0:15:09.200 the other factor that's alstually been a bit more ongoing, right, 0:15:09.280 --> 0:15:11.400 so MAS is also aware that you know, it's harder 0:15:11.400 --> 0:15:15.400 and harder to monitor and also to supervise given the 0:15:15.560 --> 0:15:17.239 huge quantity that's coming. 0:15:17.000 --> 0:15:21.400 In Sharon, there's over one one hundred family offices in Singapore. 0:15:21.520 --> 0:15:24.600 Is this leading to any consolidation, John, I. 0:15:24.600 --> 0:15:27.440 Think there's going to be a lot more consolidation happening 0:15:27.480 --> 0:15:31.080 in this space. This tremendous number of family offices and 0:15:31.280 --> 0:15:34.400 multi family offices being set up over the last three years, 0:15:34.680 --> 0:15:37.960 there has been ongoing discussions in the market around m 0:15:38.040 --> 0:15:40.480 and a happening. I think one of the big trigger 0:15:40.640 --> 0:15:44.000 is definitely the cost structures. It is actually quite expensive 0:15:44.040 --> 0:15:47.520 to maintain an office, to hire full staff of CIO, 0:15:47.880 --> 0:15:51.640 senior people, investment analysts, and I think we're seeing some 0:15:51.760 --> 0:15:54.200 challenge in the fact that you know they're not able 0:15:54.240 --> 0:15:57.760 to grow your asset under management as quickly as they think. 0:15:58.160 --> 0:16:01.480 The other factor is clearly the talent pool. Even though 0:16:01.480 --> 0:16:03.520 there's been a lot of turnaround in the market, I 0:16:03.520 --> 0:16:05.920 think finding the right person for the right job is 0:16:06.120 --> 0:16:09.640 very difficult. So that's actually constraining the growth of a 0:16:09.640 --> 0:16:13.160 lot of this external asset managers or multi family offices. 0:16:14.000 --> 0:16:17.000 Share and rising interest rates have really changed the equation 0:16:17.520 --> 0:16:20.600 for a lot of investors. Many have realigned their priorities. 0:16:20.680 --> 0:16:24.840 What are you hearing from your clients and from elsewhere 0:16:24.840 --> 0:16:27.920 in the family office business about where rates are headed 0:16:28.000 --> 0:16:29.760 and the impact of higher rates. 0:16:30.640 --> 0:16:33.680 I think the general consensus within my space is that 0:16:33.760 --> 0:16:36.840 industries are going to stay higher for longer. This is 0:16:36.880 --> 0:16:40.000 going to be a very structural high inflation cycle that 0:16:40.160 --> 0:16:42.640 many of us have not really experienced. 0:16:42.120 --> 0:16:44.440 Right in the generation or more right. 0:16:44.480 --> 0:16:46.680 Yeah, exactly so. I think in the last twenty over 0:16:46.760 --> 0:16:49.680 years we've been blessed with very low rates, and I 0:16:49.720 --> 0:16:53.080 think we have struggled to then naturally generate enough return 0:16:53.160 --> 0:16:55.960 given the higher rates. Now it's completely different, is a 0:16:55.960 --> 0:16:58.480 reverse where rates are going to stay a lot higher 0:16:58.560 --> 0:17:01.480 for longer, and I think as many impacts very clearly 0:17:01.480 --> 0:17:05.720 on financial markets and the way we invest. So families 0:17:05.760 --> 0:17:08.560 have been very very cautious this year in terms of 0:17:08.640 --> 0:17:11.159 the way to invest. So a lot of them have 0:17:11.240 --> 0:17:14.160 actually been just putting money in fixed deposit where you're 0:17:14.160 --> 0:17:16.720 getting a risk free rate of five plus percent for 0:17:16.880 --> 0:17:21.080 US dollars. They've actually been also investing in US treasuries 0:17:21.200 --> 0:17:24.240 money market instruments. So clearly, you know, the sense is 0:17:24.240 --> 0:17:27.399 that rates are attractive enough to just keep it in cash. 0:17:27.560 --> 0:17:29.320 So cash is king again for now. 0:17:29.320 --> 0:17:32.800 Well, definitely more so on a risk adjusted basis versus equities. 0:17:32.800 --> 0:17:34.880 If you can get five percent risk free, why would 0:17:34.880 --> 0:17:36.000 you invest in equities? 0:17:36.200 --> 0:17:39.040 Exactly right, So that's where the challenge comes in terms 0:17:39.080 --> 0:17:41.199 of how do we invest. If I look at a 0:17:41.240 --> 0:17:44.240 private equity fund, if I look at a private debt deal, 0:17:45.080 --> 0:17:47.520 this has to give me a double digit return to 0:17:47.600 --> 0:17:50.320 kind of justify the investment the time that we take 0:17:50.359 --> 0:17:53.760 to make those investment decisions. So this is a challenge 0:17:53.800 --> 0:17:57.119 I think with the way family offices are looking at investment. 0:17:57.560 --> 0:18:00.520 Because we're not bounded by investment mandates, we know we 0:18:00.600 --> 0:18:03.680 can be totally flexible. There's nothing wrong being one hundred 0:18:03.720 --> 0:18:04.919 percent in cash well Doe. 0:18:05.040 --> 0:18:07.439 Wealth preservation is a big priority for the high net 0:18:07.480 --> 0:18:08.160 worth investor. 0:18:08.520 --> 0:18:09.000 Exactly. 0:18:09.359 --> 0:18:13.160 You're listening to Asia Centric from Bloomberg Intelligence. By the way, 0:18:13.240 --> 0:18:16.000 if you like what you hear, and we hope you do, 0:18:16.480 --> 0:18:21.359 please rate us on Apple Podcasts, Spotify, Google podcasts, or 0:18:21.400 --> 0:18:24.120 wherever you may be listening to us. Of course, more 0:18:24.160 --> 0:18:27.919 stars are better. Your feedback matters, and we love hearing 0:18:27.920 --> 0:18:32.920 from our listeners. Sharon sim in your forthcoming book, Why 0:18:33.040 --> 0:18:37.959 Women Don't Talk Money, just the title hits on a 0:18:38.000 --> 0:18:41.240 subject that hits close to home for many women. It's 0:18:41.280 --> 0:18:43.840 true they don't talk money. Can you talk a little 0:18:43.880 --> 0:18:46.400 bit about why that has always been the case and 0:18:46.520 --> 0:18:50.360 how that is changing and reshaping the wealth management business. 0:18:51.080 --> 0:18:53.240 It's a subject that's very close to my heart. I 0:18:53.240 --> 0:18:57.520 think women in general avoid having those conversations around money. 0:18:58.320 --> 0:19:01.840 Having said that, if you look at research reports from Fidelity, 0:19:02.320 --> 0:19:06.040 women are actually better investors over the longer periods. The 0:19:06.080 --> 0:19:09.040 studies have shown that we upperform men by zero point 0:19:09.080 --> 0:19:12.960 four percent over a ten year period. Definitely, the capabilities 0:19:13.000 --> 0:19:16.119 are there. I think it's really the lack of opportunity 0:19:16.400 --> 0:19:20.359 and confidence from women to really get involved in making 0:19:20.400 --> 0:19:23.679 those investment decisions. I think the book is really about 0:19:23.800 --> 0:19:27.560 sharing those stories how women go through the various seasons 0:19:27.600 --> 0:19:30.800 of their lives, how they deal with challenges with money 0:19:30.800 --> 0:19:34.479 and investing. And we see that also throughout the family 0:19:34.520 --> 0:19:37.760 office space and wealth management, where more and more senior 0:19:37.800 --> 0:19:40.760 women are stepping up to take on leadership roles and 0:19:40.800 --> 0:19:44.920 making investment decisions on behalf of families. And I think 0:19:44.920 --> 0:19:48.000 that's really a positive sign that things are changing around 0:19:48.000 --> 0:19:51.320 the fringe. And the book is a series of interviews 0:19:51.359 --> 0:19:54.879 with twenty women in all walks of life, sharing the 0:19:54.960 --> 0:19:58.640 personal relationship with money, the emotions that women feel, as 0:19:58.680 --> 0:20:01.600 I mentioned, the lack of confidence and the sense of 0:20:02.240 --> 0:20:06.560 not understanding enough, those are actually very self crippling thoughts 0:20:06.600 --> 0:20:10.440 for women. In reality, I think women invest differently from men. 0:20:10.640 --> 0:20:13.440 The statistics have been shown that we think longer term 0:20:13.720 --> 0:20:16.960 in terms of our investment horizon. Women tend to actually 0:20:16.960 --> 0:20:18.879 do a lot more research. We tend to want to 0:20:18.960 --> 0:20:23.200 understand the investment that we're making because we actually committed 0:20:23.280 --> 0:20:24.840 to the investment for the long run. 0:20:26.080 --> 0:20:28.680 Sharon, I know your role model for a lot of women, 0:20:28.760 --> 0:20:31.960 especially in Singapore, and you must get this question all 0:20:32.000 --> 0:20:34.520 the time, what advice do you give them in their 0:20:34.560 --> 0:20:35.880 careers when they're starting off. 0:20:36.760 --> 0:20:39.480 I think the advice is really to keep learning, to 0:20:39.560 --> 0:20:42.280 really put yourself for positions that you think you're not 0:20:42.359 --> 0:20:44.520 ready for. That's something that I wish I have taken 0:20:44.520 --> 0:20:47.280 that advice when I was younger, So that's actually one 0:20:47.280 --> 0:20:50.000 thing that has actually served me well in later part 0:20:50.040 --> 0:20:52.960 of my career, where I decided to put myself out 0:20:52.960 --> 0:20:56.200 there right when you're given opportunity to try a new role. 0:20:56.760 --> 0:20:58.679 I think women in general worry too much, is a 0:20:58.680 --> 0:21:01.560 bit of overthinking about what they should do it, whereas 0:21:01.600 --> 0:21:04.119 I think men has less inhibition that way, so I 0:21:04.119 --> 0:21:06.680 think the confidence level is very different. So I would 0:21:06.680 --> 0:21:09.400 advise younger women to really do things they feel most 0:21:09.440 --> 0:21:13.879 uncomfortable in their careers. Make those choices early. You can 0:21:14.000 --> 0:21:17.000 learn from those mistakes earlier on, and I think it 0:21:17.040 --> 0:21:20.440 really helps you to broaden out your experience. The other 0:21:20.480 --> 0:21:24.359 advice is to start investing on a personal level. A 0:21:24.359 --> 0:21:27.800 lot of us feel uncomfortable making the very first investment. 0:21:27.920 --> 0:21:30.000 I think it's all a part of the learning process 0:21:30.800 --> 0:21:34.720 to make smaller bets, to maybe invest in financial instruments 0:21:34.760 --> 0:21:36.720 that you feel most comfortable in that you know a 0:21:36.720 --> 0:21:39.880 bit better and to kind of just continue this process. 0:21:40.080 --> 0:21:42.479 So for me as an investor, I started when I 0:21:42.520 --> 0:21:45.280 first joined the industry, when I was twenty two year old, 0:21:45.560 --> 0:21:48.280 straight up from college. I was actually right at a 0:21:48.320 --> 0:21:50.919 time where it was a dot com bubble, and you know, 0:21:51.200 --> 0:21:53.199 I lost a lot of money during the time. But 0:21:53.280 --> 0:21:56.000 I think it's important to go through that experience to 0:21:56.119 --> 0:21:59.399 understand that it's okay to make those mistakes and to 0:21:59.440 --> 0:22:02.040 pick yourself up and continue the investment journey. 0:22:02.560 --> 0:22:05.240 Your words remind me of two of my favorite sayings. 0:22:05.320 --> 0:22:08.560 One is time in the markets is more important than 0:22:08.720 --> 0:22:12.200 timing the markets, and you miss one hundred percent of 0:22:12.240 --> 0:22:13.480 the shots you never take. 0:22:14.160 --> 0:22:17.160 I love that, So just take those shots, just stay 0:22:17.160 --> 0:22:19.920 in the market d In the long run, everything should 0:22:19.960 --> 0:22:20.280 work out. 0:22:21.880 --> 0:22:26.280 Our guest has been Sharon sim Family Office CEO based 0:22:26.320 --> 0:22:30.879 in Singapore and author of the forthcoming book Why Women 0:22:31.280 --> 0:22:36.120 Don't Talk Money, coming from Penguin Random House in twenty 0:22:36.240 --> 0:22:40.480