Mind the Gap | Chinese wealth and family offices need professionals and private bankers
The composite global portfolios of family offices returned 0.3 per cent in 2015, from 6.1 in 2014 and 8.5 per cent in 2013, according to a report by Campden and UBS.
One current infestation of Hong Kong’s financial landscape is the rapid proliferation of family offices that are actually ill suited for investment management.
The family office concept for mainland Chinese looks like a sophistical exercise by both the clients and private bankers. The whole concept is completely misunderstood or mismanaged by Chinese clients.
Yet, it has been embraced by venal nouveau riche who want to placate their egos by creating an illusion of sophistication.
And bankers are willing to offer their services around the aspiration. It is a form of financial-cultural appropriation from Europe and North American family office organisations that doesn’t suit the way many Chinese families think of an investment enterprise.
The Global Family Office Report 2016 by Campden and UBS surveyed 242 family offices globally with average size of US$759 million in assets under management.
Family office investment returns have suffered. The data showed an alarming trend: “After returning 8.5 per cent in 2013 and 6.1 per cent in 2014, the composite global portfolio of family offices returned a disappointing 0.3 per cent in 2015.”