Banks and fund managers are tapping into demand from family offices in Singapore for alternative investments by proactively bringing such opportunities to their clients.

The family office market in Singapore can be divided into pre-2019 or ‘old’ money and the ‘new’ money that has come into since 2019 – an influx that has seen the number of private companies handling investment management and wealth management for a wealthy families increase dramatically over the last five years.

Entrepreneurial Backgrounds Support Risk-Taking

This cycle of not only assets but also inflow of talent and high net worths is described by Ken Chew, CEO & Partner at fund manager IWC as the longest and most sustainable cycle of the last half-century.

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One of the most notable aspects of Singapore family offices’ investment strategies is their relatively high allocation to alternatives – a trend Chew attributes to first generation wealth creators having a higher risk tolerance.

“This is not to say wealth preservation is not important but their entrepreneurial background means they are more willing to allocate to digital assets and explore new markets,” adds Chew. “For example, when we hosted the first Web3 conference here in 2020 there was no ecosystem – now investment is booming.”

Another factor that contributes to their openness to alternative investments is that Asian family office wealth is primarily first generation and the principals have therefore often made their money through a different business model to their counterparts in US or Europe.

Regulation and Tax Structures Support Private Market Access

According to Kelly Chia, head of investment strategy UOB Private Bank, there are a number of other reasons for the shift towards alternatives.

“Firstly, APAC family offices are investing more in private markets to diversify their risk and generate higher returns with illiquidity premia,” he says. “Secondly, Singapore has tax rules and fund structures (Sections 13O/13U and the Variable Capital Company) that make it operationally easier and more tax efficient to invest in private funds."

"Thirdly, proximity to high growth deal flows in Southeast Asia and India gives investors better access to direct and co-investments in private equity, private credit and infrastructure.”

Long-Term Horizons Align with Alternative Assets

From its work with family offices in Singapore, Ocorian also sees a strong alignment between multi-generational investment horizons and alternative assets, which allows families to prioritise capital preservation and long-term compounding rather than short-term liquidity .

“This contrasts with many western peers, where shorter evaluation cycles and public market benchmarks remain more dominant,” saysGinny Goh, director, private clients at Ocorian Singapore.

“In a volatile market environment, alternatives are increasingly viewed as a core diversification tool rather than a tactical allocation. For Singapore-based families with global portfolios, alternatives also provide greater control over risk, access to private growth opportunities in Asia and insulation from short-term market dislocations.”

Limited Domestic Market Pushes Capital Overseas

The relatively small size of the domestic investment universe forces family offices in Singapore to look beyond their home market for investment opportunities, observes Chew.

“Regionally and globally, we are looking at deep tech projects, including those that are ESG-related with impact plus economic returns,” he says. “In general, family offices in Singapore prefer to have an additional edge that is delivered through good technologies and good management teams.”

Chew reiterates that the modest scale of the investment market in Singapore makes a purely domestic focus generally unsustainable.

“The millions or tens of millions you will make here is nothing compared to what you can generate when you scale regionally or globally,” he adds. “So you should look at those start-ups that can scale globally unless there is a strong disruptive story. Singapore is a good bridge in the current cycle due to the confluence of money, talent, projects and information.”

Equities and Private Equity Lead Allocations

When asked which asset classes and sectors are most favoured by Singapore’s family offices, Annabelle Chow, head of financial intermediaries at Bank of Singapore refers to a strong preference for equities and private equity investments. The robust performance of equities over the past two years has created positive momentum - particularly in the US markets - driving increased allocations in this asset class.

Regional Biases Shape Portfolio Construction

While family offices actively seek to diversify across regions, sectors and asset classes to mitigate risk, regional biases continue to influence their allocation decisions based on geographic location and familiarity, she adds.

“For example, Singapore-based family offices typically have significant exposure to the US, Singapore and Hong Kong/China markets, while allocating less to Europe or other regions such as Thailand and Australia,” says Chow. “Conversely, family offices based in Hong Kong tend to concentrate heavily on the US and Hong Kong/China markets, with minimal exposure to Singapore or other regions.”

Chia agrees that within alternatives, allocations are primarily directed toward private equity. These include both direct and co-investments, private credit - which is rapidly gaining favour for its yield potential - and real assets such as digital infrastructure (data centres, towers, fibre) and energy transition platforms.

“Select real estate is also included in portfolios for its income generation and diversification benefits,” he says. “Sector preferences tend to focus on AI and computing, software and healthcare, along with fintech and financial services.”

Private Equity Dominates Alternative Allocations

Chia agrees that Singapore family offices are increasingly expanding their exposure across the region, particularly in India, Japan and Southeast Asia, driven by growing opportunities in digital infrastructure and renewables.

“However, their investment base remains anchored in the US,” he says. “The US continues to offer the largest pool of private market deals, with 2025 private equity transactions approaching $1.2 trillion, strong exit options and dominant private credit capacity.

In comparison, APAC recorded only $176 billion in deal value for 2024 and Southeast Asia around $16 billion. Due to political and geopolitical tensions, deal flows from China have slowed, resulting in more limited exposure.”

Private equity remains a core allocation, particularly mid-market and growth strategies focused on buy-and-build and operational transformation, says Goh. “Private credit continues to attract capital due to its ability to offer downside protection, income visibility and structural safeguards, especially in asset-backed and senior lending strategies,” she adds.

US Anchors Portfolios as Asia Provides Growth

Chia concludes that overall, Singapore family offices tend to build their portfolios with a US core for scale and liquidity, supplemented with regional investments to benefit from proximity, diversification and secular growth.