The pandemic has accelerated globalisation with Hong Kong, Saudi Arabia and Geneva all rising the ranks as hubs for Family Offices but while it has certainly made life interesting during otherwise strange times, it hasn’t stopped New York ultimately coming out on top.
In fact, more than one in four Family Office Leaders ranked New York as the number one jurisdiction for Family Offices as part of our Family Office Survey of the Year.
New York was voted as the top Family Office jurisdiction by 28% of Family Office Leaders followed closely by 24% who voted for Singapore, 19% who claimed it was London and 12% who ranked Geneva as the number one home for Family Offices. Other answers given included Dubai, Hong Kong, Jeddah and Amsterdam.
New York is the home of Family Offices; it is where the term itself was coined by the family of J.P Morgan in 1838 and popularised by the Rockefellers some four decades on. Its high density of investment firms, banks and financial talent have kept it in prime position with Family Office Leaders claiming its high quality of living, physical location and time zone make it both accessible and attractive for trade and opportunity.
New York is also popular it seems with Principals who have a Family Office elsewhere on the map. As part of the same survey, we asked Family Offices where they would open a second and New York fell in third place with 17% of the vote. As a secondary office location it was beaten only by Singapore and Geneva, both with 20% of the vote and London which was voted the most idyllic location for a second Family Office by 23% of Principals.
London has always followed in the footsteps of New York as a major trading hub and with its impressive vaccination programme opening up the city to business and beyond it’s no wonder why but with travel off the cards for many destinations further afield, how has it impacted global investments?
The Agreus Survey revealed that 29% of Family Offices invested in new geographical regions over the last 12 months with Asia being the most popular investment spot. 50% of Family Offices who invested in new regions over the course of the last year invested in Asia followed by 19% who invested in the Middle East, 18% who sought new opportunity in the USA and 13% who did the same in Europe.
Asia has seen phenomenal growth throughout the pandemic with China’s economy growing a record 18.3% in the first quarter of 2021 alone, the biggest jump in GDP since 1992. Chinese billionaires also saw their wealth soar by 41% while Beijing overtook New York as Billionaire Capital and Hong Kong rolled out its red carpet to Family Offices. It is therefore unsurprising that the region has captured the attention of 50% of diversified families and the Middle East in second position is quite easily explained too.
The Middle East is playing a pivotal role in the IPO boom we see so often today and its link to Family Offices is Family Business. More and more of which are pushing to go public and creating Family Offices to manage the liquidity it creates.
Family businesses are the backbone of the Middle Eastern economy with some of the largest businesses in the region being run or controlled by families. In Saudi alone, more than 60% of all operating businesses are family owned and collectively they contribute to more than 33% of GDP.
The listing of Saudi Aramco has been a massive driver in motivating families to take their operating businesses public to help grow their enterprises and generate new wealth. In turn, this has led to a heightened interest in the concept of Family Offices as next-generation leaders look to structure their private wealth and professionalise their families.
With favourable taxation and a drive to change their global image, the Middle East is definitely a growth area in terms of wealth creation and a space to watch out for but it isn’t quite New York or London which unsurprisingly rein on as Family Office playgrounds.
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