Family offices recalibrate strategies amid geopolitical uncertainty

Family offices are entering a period of profound transformation, recalibrating strategies to withstand geopolitical volatility, regulatory shifts and new investment priorities.

TMF Group’s latest white paper underscores diversification across jurisdictions as the defining approach, with families insulating themselves against regional instabilities. 

“As geopolitical uncertainty increases, families are increasingly diversifying their investments, structures and operations across jurisdictions,” Ivy Choa, market head of private wealth and family offices, North Asia, at TMF Hong Kong, told AsianInvestor. 

She cautioned that international expansion “can lead to increased operational complexity related to regulatory compliance differences across jurisdictions, greater regulatory scrutiny and more complex cross‑border requirements.”

On the investment front, the report said that family offices are tilting towards private credit and direct investments, seeking stronger returns and greater control compared with traditional fund allocations.

GENERATIONAL NUANCES

Generational change is also reshaping investment priorities, amplifying the focus on sustainability. Younger family members are embedding ESG considerations into standard practice, although policy support remains uneven.

“Despite the mid- or short-term impact of increased pressure on the energy market on ESG considerations, for many family offices these remain key and are not viewed ‘just as a trend’,” Choa said.

While older generations remain hesitant, she expects this to dissipate as younger members’ influence grows, making ESG a permanent pillar of strategy.

ESG considerations of family offices

AI is also being increasingly explored to support research ahead of investments and improve operational efficiency, though families are grappling with how best to integrate it.

“Some of the challenges they are facing are linked to the validation of research and information sourced using AI and the potential privacy, data and cybersecurity risks,” Choa noted.

Generational differences in approach add another layer of complexity, but collaboration remains strong, with families openly sharing experiences and best practices due to the non‑competitive nature of their operations.

REGIONAL DYNAMICS

Hong Kong is preparing for CRS 2.0 (the OECD’s updated Common Reporting Standard) in 2028, which will heighten transparency and compliance obligations, particularly around client tax residency.

“We are seeing a growing number of family offices being established in Hong Kong, which is a very encouraging sign for the market,” Choa said.

Hong Kong is now home to 3,384 single-family offices after adding 681 in two years, according to a February market study by Deloitte. 

Meanwhile, the number of single-family offices in Singapore surged past 2,000 by the end of 2024, a growth of over 40% since 2023, deputy chairman of the city state's central bank Chee Hong Tat said at the UBS Asia Wealth Forum conference in Singapore last year. 

Singapore remains an important hub, particularly for South Asian clients, while Malaysia, including Labuan, is attracting interest through relaxed rules governing Malaysian assets within Labuan trusts and foundations.

In the Middle East, the UAE and Saudi Arabia are strengthening governance and compliance frameworks, even as families diversify globally to mitigate geopolitical risk. Saudi Arabia’s Vision 2030 reforms are encouraging diversification beyond oil, with family businesses—accounting for nearly 60% of private sector economic contribution—investing in technology and new sectors.

By diversifying globally, embracing technology, professionalising operations and aligning investments with long‑term sustainability, family offices are positioning themselves to safeguard their legacies in an era defined by uncertainty and opportunity.