Singapore family offices pivot investment amid global volatility
This will drive further investment in non-US developed market stocks. The survey, which included FOs that oversee Singapore's estimated S$5.4 trillion in assets under management (AUM), indicates a clear shift away from traditional US-focused investments.
The spectre of US tariffs on the horizon, plus indications of a possible economic downturn, have led 62% of FOs to focus their attention on European and Japanese equities and away from the traditional focus on US equities, bonds, and cash assets. They are seen as a strong hedge, due to generating stable returns amid uncertainties and US market volatility.
The move by FOs worldwide comes amid growth in Singapore's FO sector. The city-state saw over 2,000 single-family offices (SFOs) operating there at end-2024, up from 400 SFOs in 2020.
Singapore's central bank is promoting a diversification push. Incentives like the Section 13O and 13U tax schemes are meant to foster an environment where FOs can explore alternative assets.
Beyond equities, FOs surveyed are also looking to channel investments into fixed-income securities and private markets, such as private equity and real estate. 51% of FOs are optimistic about private credit — non-banking debt that is privately traded, while 75% are bullish on infrastructure.
Lili Forouraghi, Head of Family Office, Healthcare, Endowment and Foundations for BlackRock in the US, commented: 'The sustained demand and interest in private credit and infrastructure from family offices is a testament to the illiquidity premia and differentiated return opportunity in the current investment landscape.'
'Access to opportunities and the right strategies continue to rise in importance as these asset classes evolve from niche strategies to the cornerstone of client portfolios,' he added.
However, analysts caution there are risks ahead. Europe has to contend with energy price volatility and geopolitical tensions, which 84% of FOs consider critical. Meanwhile, the long-term growth prospects for Japan are limited by ageing demographics.
Overall, the trend benefits Singapore due to its safe-haven status. The US-China trade tensions and their impact mean Singapore's neutrality, stability and governance framework position it as a destination for reallocating capital.
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