Mapping the family offices spreading wealth across startups in SEA (updated)

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This is the updated version of the article which was first published on April 16, 2024.

A look into Southeast Asia’s most successful publicly listed conglomerates will reveal that most were built not by a single founder, but with the help and support of families.

Research from EY-Parthenon shows almost 75% of conglomerates in the region are owned by families compared to just 50% globally.

As such, it’s not surprising to find that family offices have invested in Southeast Asia’s emerging and most successful startups as well as VC firms. A family office is a privately held company usually set up by ultra-wealthy families to serve as investment vehicles to deploy their money, either directly or as limited partners in a VC fund.

Sameer Narula, managing partner of private investment firm August One, tells Tech in Asia that there are two types of family offices.

He explains that multifamily offices “charge families a fee to help them invest their capital.” On the other hand, single family offices involve one family that hires “an ex-banker or a manager to help manage their capital.”

August One has worked with both, helping family offices invest their capital in companies usually based in Europe. The firm also has a Singapore-based accelerator called One Blue.

Since the end of pandemic-induced lockdowns, family offices have been diversifying their portfolios. While these entities previously focused on more traditional assets like real estate and securities, they have developed an appetite for private market investments in startups and VC funds.

A Citibank official in Singapore even said their family office clients allocate as much as 40% of their portfolio to private market investments.

A safe place

Asian family offices often look into investment opportunities that could help them achieve wealth safety.

“Unlike Western family offices that want to preserve their wealth, families from the Global South usually seek to keep their wealth safe,” Narula observes. Typically, these families have just grown their wealth “in the last 20 to 30 years, so they keep it in countries like Singapore, where the currency is stable,” he adds.

Tech in Asia’s data shows that most of the family offices that back startups in Southeast Asia are based in Singapore. The Monetary Authority of Singapore (MAS), the country’s central bank, has actively courted this investor class, which grew from 400 by the end of 2020 to 1,100 by 2022. MAS also continues to provide incentives to family offices that invest in local entities.

That said, while these family offices may be set up in the city-state, their owners may not always be Singaporeans.

For example, German entrepreneur Tom Wolf established a single family office called Two Family Office. Wolf is the founder of Metawolf, a publicly listed manufacturer and ecommerce operator in Germany.

Follow the money

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